Lesson on Hiring Independent Contractors

Joe, good info, there are pitfalls to IC vs Employee, on both sides.

That's not entirely true.

You provide product information to a lot of different people your outsourcing work to whether it's a call center, answering service, outsourced marketing company or consultant so that they may know what your business/product is about and how to handle the work you are outsourcing to them.

Your first point is not really a big deal because your paying them a commission not a salary so you need to have the mindset that they are not yours exclusively in the first place, if that's not okay with you then commission sales reps are not something you should ever consider because that's standard.

You can cover yourself with NDA's and a independent agent agreement that prohibits them from using your company information/product information anywhere but in their work for you.

As for your second point your accountant may have been misunderstood or just very cautious. According to the IRS:

Independent Contractor Defined

They ARE an independent contractor if you only direct the end result (sell my products) and not how or when they do it.

Which is what you do with a commission sales rep. They are experienced professionals and know how to sell....you leave it up to them to sell your products (result) and they can do that however they want.

You can give them suggestions (verbal) on how to do it like explaining to them your sales process that is working now, but leave it up to them how they end up doing it.

And let's be real here, even if you did require they do a certain sales process verbally, the IRS will never find out, and if they agree to work for you they will never tell the IRS because they are independent sales reps they WANT to be IC's they don't want to be employees, they make their living on a commission it's the type of people they are.

There's really no danger or extreme caution needed in hiring commission sales reps as long as you don't formally tell them WHEN they need to work..that's the only thing that really makes the clear distinction.

I was about to write a long response, but MaxwellB beat me to it. He's spot on.

In short - That is incorrect. You can't expect anyone to do anything with you, for you or for your benefit without providing them with product info and materials. Whether I'm IC, w-9, your employee, or providing you with a service of sales, I have to know what you do, what you sell, what you offer, how much it costs, what you've done, what worked, what hasn't worked, what you expect, etc etc. Otherwise, you're not going to get anything you want.

The IRS guidelines seem to have control as the determining factor, not simple points like you laid out. They have multiple points so as to make a determination, and they seem to go by the whole picture from what I've experienced and seen over the past 13 years. Basically, if you control the hours, services performed, supplies and equipment, and the person doesn't work for anyone but you, you've got an employee. In my business (cleaning), lots of homeowners hire people to clean and then dictate and provide all supplies and equipment, want to pay them hourly, and exercise control over timing, and that can easily create a headache for a homeowner if that cleaner gets hurt or doesn't file taxes, gets busted, and then claims to have been an employee. If you hire a real business for something, they should have other customers, be able to provide the professional service with their own supplies and equipment, take care of their own scheduling, etc. It all seems to come down to control. The more you want control, the more you want an employee. I've done lots of contract work in the past in various industries that provided lots of training for specific types of jobs, but I had to have the equipment, transportation, and schedule my own jobs with various companies as an IC.

I could go back and forth over this but it's really not a good use of my time. I highly recommend that everyone research their own unique situation before making a hiring decision.

I wouldn't say poop on the IRS. I look at a time coming when anyone doing any kind of business generating revenue over the internet to pay their fair share in taxes.
I also see a ton of this garbage where peeps are working their tails off for table scraps change to make some side money to change.
They have a minumum wage standard in the States for a reason!
Look out World, it's only a matter of time before Big Brother closes all the gaps!

Hi there,

No need to shout.

This is the last place anyone should seek or attempt to provide legal advice. It's obvious midasman that you sometimes provide good advice and sometimes you talk out of your backside. The latter is what you're doing here.

Banks will not comply with someone just walking in and presenting a document. The process is called a garnishment and is applicable only after you have a court order.

Talk to a lawyer. Not a forum.

All the best,

Sasha,.