Lextree Simply the best software for managing legal entities and documents.
The Berkman Letter Practical analysis and commentary for business, law, and more.

At what point am I obligated to offer contract employees full time positions?

1
star
2
answers
1412
views
I own a small business with no employees and have been using various contractors for sales and IT work over the last few years.
Answers
2
stars
There is a section in the EEOC compliance manual that provides details on who should be considered and employee. If your independent contractors have been working for you continuously for a long time, don't work for anyone else, and you direct most aspects of their work (hours, location, etc), then there is a good chance you should be treating them as employees (withholding taxes, providing any benefits that you intend to make available to regular employees, etc). If your are using various independent contractors on a project by project basis and they are largely in control of how and when they work, have their own equipment, tools, etc to get the job done, then there is a good chance that they are legitimate contractors. However, you should only make this determination based on advice from legal counsel with a thorough understanding of FLSA, EEOC, and IRS requirements.
0
stars
The SBA provides a brief summary of key considerations in determining whether or not someone you have hired should be an employee or contractor, which essentially boils down to the amount of control you exercise over their work and how independent they really are from your business. You should be aware that whether or not you hire someone as an employee, they could be considered an employee under FLSA (potentially resulting in liability for your business). As a result, the question is not really when you are obligated to offer them full time employment but if they are already effectively employees and need to be treated as such.