Contracts and Agreements

The Art of Making the Perfect Job Offer

The difference between Employees and Independent Contractors

Whether a person is an independent contractor or an employee generally depends on the amount of control exercised by the employer over the work being done. Here is a quick Test, for a full list of questions to ask yourself, see “W-2 Employee vs 1099 Independent Contractor”

There are 3 major categories to consider:

  • Behavioral: Does the employer control your work and how you perform the job?
  • Financial: Are the business aspects or tools and supplies of your job controlled by the employer?
  • Relationship: Are there written contracts or benefits (such as insurance, a retirement plan, or vacation pay) in place?

There are many cases where a business classified their employees as independent contractors only to have it determined later that they were in fact employees. If the IRS or State department of Labor and Industry determines that your independent contractors are really employees, you could be in serious financial trouble and be looking at repaying all the back taxes, including the employee’s share as well as interest and penalties.

For more detailed information on how to determine the difference or to find out the legal and tax obligations of a misclassification, please see “W-2 Employee vs 1099 Independent Contractor”

The Art of Negotiation: Anticipate your applicant’s response to your offer

Prepare yourself questions to your offer. Some applicants are clever negotiators, so you will need to stand strong and stand by your offer; this could also be a time that you see something in the potential employee that you really like or don’t like! And although it’s fine to let the candidate know you’re interested in him or her, avoid coming across as desperate by trying to meet every demand or revision to your offer. If you walk into negotiations with the best possible offer, let the candidate know this is the best you can do, but that you think he or she will make a great addition to the company. It is definitely give and take on both sides to reach a mutually satisfactory agreement.

For a step by step instructions on how to make an offer, including suggested responses to have handy if your candidate wants to negotiate their job offer, see “The Art of Making the Perfect Offer”

Employment Letters and Independent Contractor Agreements:

Although written employment contracts or offer letters may not be required by your state’s law, employers should clearly state the terms of a new hire’s offer in writing to avoid any misunderstandings. It is crucial that offer letters include “legal” wording to protect you from confidentiality, disparagement and solicitation issues. Our letters and contracts include a HIPAA clause. Anytime you are dealing with any health information, it is essential that this information remain confidential. This is a federal law. If your business does not deal with health information, feel free to remove this section.

The offer letter and contract samples found on this site are to provide a “guide” for you. It is always a good idea to have all official documents reviewed by an attorney to ensure all state compliance laws are being met. Laws tend to vary from state to state.