Like people who tell you to quit calling yourself an assistant when you are a business owner. 😉
Seen around the Internet:
Hi All! I would appreciate your input and opinions on my current scenario.
I have a potential new client starting next week who is guaranteeing me 20 hours of work per week. Because he is guaranteeing 80 hours per month, I’ve reluctantly accepted a rate that is less than my typical hourly rate.
I operate on a monthly prepaid retainer that’s worked into my contract, as most of us do. The client is not willing to prepay and would rather pay “immediately via Paypal at the end of each week for hours worked”.
I’m having a hard time accepting this. How would you respond? Would it be fair to respond by asking for prepayment for each the week? (rather than at the end of the week)
I don’t want to lose the opportunity but I do need to hold strong on my policies. I should mention that this client was referred to me by someone I trust and who also works with him.
Fuck that guy. 😉
All snarkiness aside, you’ve answered your own question: “I do need to hold strong on my policies.”
So what’s the problem? Why are you trying to talk yourself into stepping over your own standards?
This is a bad client waiting to happen.
And by acquiescing when you’ve already made your policy clear, you are teaching this client that you will simply roll-over at the first hint of objection. Hell, you already let him put you on the sale rack in the bargain basement. Not a good precedent to set in the relationship whatsoever.
Stop letting clients tell you what to do in your own business.
You simply tell him pleasantly and matter-of-factly, without any angst, anger or apology, “This is how I work with clients… This is how things work in my business… This is who I’m looking to work with, who is a fit for my practice… This is who I do my best work for and who gets the most out of working with me… If that works for you, great. If not, I’m afraid we won’t be able to work together and I wish you well.”
(HINT: And who is it you work best with? People who don’t try to bargain down your fees and who pay upfront according to your billing policies without trying to haggle and dicker and argue with you over them.)
If you want a business that makes you happy and doesn’t cause you a bunch of problems and headaches, stop letting wrong-fitting clients talk you into things you don’t want to do.
Stop talking yourself into doing them and being a self-sabotager.
Even if you decide (or rather, talk yourself into being okay with) getting paid upfront each week instead of each month, and assuming this prospective client agrees to that, you’d be making an exception in your business that is only going to make more work for yourself by complicating your business and billing—for this one client with whom you’ve never worked before and who hasn’t earned any reason for you to be bending over backward to twist your policies and administration into pretzels for him.
There are PLENTY of clients in the world… ones who will happily and easily work with the standards and policies you’ve set for your business.
Focus on that fact and those clients.
Because if you keep yourself stuck in poverty/scarcity mindset, all you’ll ever have are un-ideal, pain-in-the-ass clients, and you will forever be held hostage by them in your business (and your life).
I want you to sit down right now and start a list of all the traits and characteristics that make up an ideal client for you. Every time you work with a great client, update this list. Do this throughout the life of your business.
HINT: Working easily with the standards and policies you’ve set in your business should be item #1. Being ready, able and willing to make the commitment to working together in whatever way you’ve decided works best for you (e.g., upfront monthly retainer) should be item #2.
Then, start a list of all the characteristics of an UN-ideal client for you. These are all the red flags that tell you when you are dealing with someone who is going to be a PIA. And write down WHY those traits and characteristics make for an un-ideal client. Every time you work with a less than ideal, unhappy-making, pain-in-the-ass client, update this list. Do this throughout the life of your business. This exercise makes you more conscious of all the red flag signals your intuition starts waving at you when you find yourself dealing with someone who is not going to be great to work with.
Then, next time you are tempted to step over your standards and be your own worst enemy, pull these lists out to remind yourself why it’s not a good idea and why it’s always better to hold out for what you want in your life and not settle for anything that is less than ideal.
Of course, the other way to really learn this lesson is to take on every client who comes your way without barrier, without discernment, without any thought or prequalification for whether or not they are ideal or un-ideal for you. Let each of them individually dictate how you run your business and what your standards and policies will be.
You’ll find out real quick why it’s not a good idea to step over your standards and ignore what your gut is telling you.
(You also would get some serious benefit from my pricing and packaging guide, which also teaches you how to present support plans and talk about fees and navigate that whole conversation around getting paid.)
Came across this article about how Sweden shortened their workday to six hours.
Germany is similar, with basically a 7-hour workday.
All of Europe really has a much more humanistic approach when it comes to work.
Many businesses are closed on Sundays. Many will close for several weeks during the holiday season. And they take longer lunches with time to actually eat slowly, enjoy their meal, and recharge.
The U.S. has a lot to learn from them because for all the time off people have over there, they are more productive, healthy and well-adjusted.
In my business, there are naturally some days here and there where I am nose-to-grindstone all day doing client work. And I enjoy those occasional balls-to-wall challenges.
But those are the exception, not the rule.
It wouldn’t be humanly sustainable for very long otherwise, and the service and quality of my work to clients would suffer as a result.
That’s why, in my business, I generally have a four to five hour workday.
It’s like that for several reasons.
First, I don’t operate an “assistant” business model. That means I don’t work with clients like a day-to-day assistant (like in the employment world).
I don’t take on work that inherently requires me to be chained to my computer all day, every day, or that can only be done within certain client-imposed hours.
And I don’t provide instant/same-day turn-around on client work requests. I only take on work that can be scheduled within my work management system.
If it’s work that can’t be done within a three-day window, then it’s not work I take on, and the client has to either do it themselves or plan ahead better and provide more lead time in the future.
That’s because it’s a standard in my life to operate my business around my life, not the other way around.
I firmly believe that your business should support your life, not suck the life from you.
And it’s important to me that my work and business be structured in a way that gives me plenty of breathing room so I can do great work and take fantastic care of clients while also having time and space to take care of me.
(Remember, ultimately, taking care of you is taking care of clients. Someone who is overworked, stressed and unhappy is no good to anyone.)
It’s also why I don’t do what I call “wipe your ass” work such as making appointments, answering phones or managing anyone’s day-to-day calendar or inbox.
Never have and never will and my business and income haven’t suffered one bit (in fact, I make more money and command higher fees because of it).
That kind of work is what “assistants” do, and as an Administrative Consultant, I’m not an assistant. Clients need to manage their own calendars, inboxes and personal appointments.
When you take on that kind of work (answering phones, managing client calendars and inboxes), you put yourself into on-demand/same-day timing because that’s what so much of that work entails. When you do that, you end up creating a business that has you working like an employee and requires you be attached at the hip to your computer and email every single day.
Leaving you very little of the freedom and flexibility you went into business to have.
Don’t buy into the BS that you have to be anyone’s personal assistant to also provide admin support and be of value. They aren’t the same thing and are not inextricably entwined.
Those people who think that have only ever known how to work with clients like an employee and don’t know how to think more entrepreneurially about themselves and how they offer their service.
The more you know your target market and their business/profession, the better you can identify and focus on the more important and actual administrative work that moves their business forward, helps them accomplish their goals, and creates real, tangible results.
Beyond that, I let clients do their own ass-wiping. 😉
If they need someone to work like an employee/assistant to them each and every day, then that’s who they need to hire, not me. Those aren’t the clients I work with.
Because I’m not in the assistant business. I’m in the administrative support business. Two completely different things. 😉
If you’d like to finetune your own administrative support business and work with clients in a way that gives you more freedom and flexibility in your life—which, I might add, also allows you to be more productive and take far better care of them in the process—I share my exact business model and management systems and how to implement them in my guide, Power Productivity & Business Management for Administrative Consultants (GDE-41). Check it out.
I had to go to a laundromat recently to wash an extra large faux fur comforter as my washer is too small for the job.
Ended up having an engaging business conversation with the owner after sharing with him how I had first gone to another laundromat and immediately turned around and walked right back out.
Because it was gross and filthy! Looked like it hadn’t been cleaned in years, flotsam left in the washers, garbage cans overflowing, every other machine broken, dirty water all over the floor, no attendant to be found. Disgusting! That’s when I Googled for alternatives and found his place.
So I drove over there, and let me tell you, it was like night and day!
Clean, gleaming surfaces everywhere you looked. Every single washer and dryer extra large and roomy… and NOT broken. A sparking clean restroom. A little “convenience store” counter to buy supplies and munchies if you like. And the owner there sweeping the floor, wiping down and checking machines, picking up lint.
He immediately recognized I was new and came right over to assist me. This was the Ritz-Carlton of laundromats compared to the first one I went to!
I told the owner how impressed I was with his place, how awful the other one was and how I had immediately left.
He thanked me so much and was truly touched as he takes great pride in his business.
He said it might be a little higher priced, but you pay for quality.
“Yesssss!” I exclaimed.
I added that I didn’t think it was all that expensive anyway (my complete wash and dry was only $7 total) because if you go to a crappy laundromat with broken, inefficient machines, you’d end up pumping in way more time and money than that.
Perfect example of how the so-called “cheap” comes out expensive.
He couldn’t agree more and told me how one time some guy from the other laundromat I had first gone to had come in and was badmouthing his place to all his customers, telling them how expensive this place was and how much cheaper it was at the other (crappy) place. The owner told the guy, “Hey, I don’t know what you’re trying to do, but my customers are free to go wherever they choose.”
I said, “But you know what? Don’t you change a thing. Because you have different markets. Their market is not YOUR market. I am very happy to pay well for a clean, safe place, state-of-art machines that actually work and do the job right the first time, and a helpful, friendly owner like you.”
So many great things about this:
- Knowing who your market and ideal client are (hint: it’s not the short-sighted, penny-pinching miser who cares about nothing but saving a buck at the expense of everything else).
- Understanding your value in relation to what your market and ideal client values.
- Pricing profitably so you can provide great quality and customer experience.
Be thinking about how this translates in your business:
- What can you do (or continue to do) in your business to give your clients and prospective clients a great experience dealing with your company?
- How does pride in your work and service show up for your clients?
- Do you see the correlation between pricing well and being able to take great care of clients?
- Are you pricing at a level that allows you do great work, focus on ideal clients and give them a great experience?
- How well to you understand who your market and ideal clients are? Who do you WANT to be your clients?
Every industry conducts webinars and teleconferences for its members. These present yet another great opportunity to connect, learn more about and interact with your target market.
For example, my target market is solo attorneys in business, intellectual property and entertainment law. The legal industry has thousands upon thousands of continuing education webinars and teleconferences many of which are open to anyone in legal services, not just attorneys, and many of which are free or low-cost.
So be sure to attend the webinars and teleconferences in your target market’s industry because it puts you smack dab in the middle of a “room” full of them. Then be sure to ask at least one question or otherwise participate in the discussion.
When you do that, you have a non-salesy, legitimate reason to introduce yourself, give the name of your business (and/or URL) and briefly explain that you provide admin support for those in the [YOUR TARGET MARKET] industry.
Sometimes the Q&A/discussion is also done by chat which is yet another opportunity to state your name, biz and provide your biz URL.
Plus, when you ask smart questions relevant to the topic, it makes your business look good, too. It inspires confidence and credibility because it’s a demonstration of the kind of smarts and sensibility you’d bring to table for your clients.
If you haven’t chosen a target market yet (a target market is simply a field/industry/profession that you cater your admin support to), be sure to download my free guide How to Choose Your Target Market.
“Presently 81% of freelancers have trouble getting paid by their clients and, on average, each unpaid freelancers is owed over $6,000 in salary.”
Language like this drives me freaking nuts, and it’s responsible for the perpetuation of freelancers continuing to NOT UNDERSTAND ANYTHING.
Freelancers are BUSINESS OWNERS.
They don’t get paid a “salary.” That is the what EMPLOYEES get, which freelancers are not.
What they are owed is $X in unpaid invoices and fees from deadbeat clients (who probably think and act like they are employers because the moron freelancer doesn’t set them straight in the first place).
If they understood better the distinction about being in business for themselves, they would know not to allow any client to get that far into debt with them in the first place, stop work before it ever gets that bad, and if they were really being smart, require more money (if not 100%) upfront.
It’s yet another example of why no one should be using the term “freelancer.”
Not only does it make people think of someone who is only casually, incidentally, haphazardly working on the side for pocket money, as a result it sets the wrong expectations and mindsets in clients that are a cause of a lot of these issues in the first place.
Perfect example — here’s what one deadbeat client retorted to a “freelancer”:
“This isn’t your full time job, this is just a side job, so why do I need to pay you?”
As an Administrative Consultant, you are not a freelancer. You are in an actual committed, professional business with the intention of providing an ongoing and well-rounded body of support as a whole to clients for the long-term. (And if you aren’t, then you’re not an Administrative Consultant.)
You will be doing yourself a huge favor by deleting that word from your business vocabulary and never using it again.
Here are some ideas for where to find potential clients to help get your creative thinking going.
Since I work with solo attorneys (specifically in the business, intellectual property and entertainment law realm), that’s the target market I know best. However, anyone can extrapolate from these ideas to fit their own target market.
One of the reasons and benefits to have a target market is that it helps you more easily identify where to find clients. Because once you know who you are focusing on, that will tell you what support they need, how to craft your message, and where to begin looking for them.
(By the way, a target market is simply a specific industry/field/profession that you cater your administrative support to.)
For example, if you work with attorneys, the next step is to identify any and all places where you may be able to meet, connect and interact with, and get in front of said attorneys.
What do attorneys deal in very often? Lawsuits.
Where do they go when they litigate those lawsuits? To the courthouse, right?
So, are there any opportunities there? Are there attorney bulletin boards where you can put your business card, flyer, brochure or other handout? Is there a lawyers lounge where you can do the same? What about a law library?
What about your local and state bar associations? Do they have any online forums and listservs you can hop on? Do they have a print newsletter or online blog? If so, you could offer to contribute some articles (and thereby market your business in the process). Find out what advertising opportunities they have. For example, my state’s bar newsletter has a $50 advertising fee which is a small price to pay to get a targeted ad in front of all their attorney subscribers that gets them to my website or video presentation.
Ideally, you are focusing on the solos and boutique firms because they are the ones who truly have the need for our solution. Big law doesn’t need or care about what we do; they really have no real need for our solution. So keep your message, content and efforts geared toward the solos/boutique firms.
Are there special groups that these solos/boutique firm attorneys belong to, online and off? Find out what opportunities might be there for you to speak to their group or offer a webinar or give a presentation. You could teach them about what you do as an Administrative Consultant and all the ways your support helps their practice. Or, it could be about all the ways they can continue to operate in the online realm and further systemize/e-vitalize their practice and operations. (These are just a couple ideas, put your thinking cap with your own target market in mind. What would their ears perk up at? What are their common problems, challenges and obstacles, and what can you share that will help them?)
Talk to your area attorney associations and ask them if they have ideas on how you can connect with their solo attorney members.
If you know of some solo attorneys, TALK to them. And to be clear, don’t market to them. This is a knowledge and information gathering effort. Just see if you can speak with them informally and pick their brain. The goal is to learn as much about them as possible, what their interests are for their practice, where they are hanging out, online and off. The more you talk directly with people in your target market, the more inside knowledge you can glean that will help you in your efforts to support them, gear your solutions toward their needs, goals and interests, and find and connect with them.
Who/what are some of the vendors these lawyers use (locally, geographically and online)? There’s case management software services. There are process services. There are investigators. There are couriers, court reporters… the list goes on and on.
Contact these people and businesses. See if there are some advertising or co-marketing opps where you can take advantage of their own established footing in the industry to get in front of new prospective attorney clients. Maybe they have a blog or newsletter you can contribute to or advertise in/on.
Keep in mind that your services don’t compete with theirs; you are in complementary industries with the same audience. If you talk with them, you might be able to come up with some mutually beneficial referral partnering arrangements. Start the conversation; you’ll be surprised at what you might come up with, what ideas you hit upon.
Don’t be afraid to think outside the box and try new ideas. Get creative. Be up to try anything once.
At the same time, get good at recognizing when something or some place is a waste of time so you can move on quickly (and stay positive).
Do any of these ideas jump-start your thinking and how to apply them to your own target market?
PS: If you don’t have a target market yet, at least start thinking about one, especially if you’ve been struggling. Download my free guide on How to Choose Your Target Market.
I am still trying to lock down clients. Any suggestions as to how to obtain clients? I have been using Fiverr for sample gigs (decent income for small projects). I am reaching out to people on Linkedin as well as my previous employer (we have a great relationship so it’s no fluff, but no clients need me yet), but once I move to the pricing for everyone else, they are no longer interested. I feel my price point is comparable, but I can’t work for pennies on the hour. How are you guys making it work? —RB
Fiverr might be good for pocket change if that’s all your needing out of it. But you’re never going to find real clients there (i.e., the kind that pay the kind of money you can actually live on), much less retainer clients who pay a monthly upfront fee for across-the-board administrative support.
“Decent income” is relative. What does it mean to you? Have you done any cost and pricing analysis on what it takes to run your business, earn an income (yes, they are two separate things) and earn a profit? (Profit is yet a third category of earning; you don’t have a business unless you are earning above and beyond your operational and income needs.)
It’s important to understand that there’s a big difference between the economics of employment and the economics of business. That is a huge area of education for a lot of people who are new in business. They often don’t initially understand that $12/hour employee wage will not begin to earn them a living as a business.
You’re also looking at things from the wrong angle and going about the process too generally. Because it’s not about the price point.
(Don’t worry. Everyone goes through this thinking when they’re new in business—it’s a process of education, and I’m here to help you with that).
Getting clients begins and ends with WHO your target market is. Have you done that work yet?
RB: I have my target market (insurance), I guess it’s that I am not known maybe? Yeah, I love Fiverr for some quick cash, but trying to convert the folks I am talking to is what I am having trouble with (none from Fiverr). Maybe I need to reevaluate.
You’re not going to be able to convert those people because they aren’t the right audience, and it’s the wrong process/intention on the wrong platform. You’re trying to fish in an empty pond basically.
It’s not about being known. You don’t have to be known. Prospective clients don’t even need to have ever heard about our industry whatsoever.
It’s about YOU understanding THEM (your target market), their business, their industry, how their business is run and how you can support them, and you understanding what they gain and how they benefit from this solution (this is how you will articulate your value to them).
And, of course, choosing the right market.
“Insurance” is pretty broad/generic. What does that mean? What kind of insurance specifically? Who in the “insurance” field are you focusing on?
Because insurance “companies” don’t need what we do. When a company is large enough that the workload inherently requires in-house staff, and has their own staff, you are barking up the wrong tree.
You want to target solo/boutique business owners. They are the ones who have the highest/greatest need for the solution we’re in business to offer, value it more, and are thus more interested and willing to pay for it.
Once you get clearer about all of these things, that is going to tell you where you should be focusing your efforts for more fruitful results.
And the smarter you get about that, you’ll find that you won’t want or need to waste your time in places like Fiverr. 😉
Here’s what I recommend:
1. Get my free ACA Income & Pricing Calculator and go through those exercises. It’s important to get very clear about your numbers and know your pricing baseline.
2. Download my free guide on How to Choose Your Target Market and go through those exercises. This is a necessary part of the process of getting clients. If you don’t know and specifically define who you are talking to, how can you ever find them much less know how to support them administratively? 😉 Once you get clearer about who it is you are seeking, that will inform all your next steps and answer all the questions you have about how to find them, where to find them, how to support them, how to craft your solution and speak their language. This is such a vital step that will make finding clients so much easier.
There’s a lot more to it than this, of course, but these two exercises are the best place to start.
You CAN do this! It’s work, but it’s legwork that must be done first if you’re going to start seeing results. The alternative is to keep plodding along for years on end as many people do.
You may have heard that virtual staffing agency Zirtual abruptly ceased operations August 10 without any warning or notice to workers or clients.
Today, we learned that Zirtual has been bought by Startup.co.
There were a lot of problems with this company, not the least of which was poor business planning, unsustainable growth, and the illegal misclassification of employees as independent contractors, the latter of which is my biggest peeve.
A business model based on exploiting workers and disregarding employment laws is bound to fail sooner or later.
This is why it’s so important for business owners to do business with companies and independent professionals who operate legally and ethically.
It’s also why it’s important for you, as a worker, to recognize going in whether a company you consider working for is operating legally and going to treat you fairly and lawfully.
Nothing angers me more than people being taken advantage of and exploited without their knowledgeable and fully-informed consent.
For anyone who worked at Zirtual (or any virtual staffing company), before you jump from one exploitive situation to another, I want to shed some light on employment and business so that you cannot be taken advantage of so easily in the future.
First, Some Basics
In the world of work and services, you are either an employee or you’re a business.
There is no legal middle classification where someone “works like an employee but is paid like an IC.”
That is illegal.
Independent contractor, 1099 contractor, freelancer, self-employed, independent professional… these are all just different terms that mean the same thing: business owner.
As an IC, you are required to pay 100% of your own employment taxes whereas when you are employee, your employer pays half as well as other taxes that are fully employer-paid.
There is also no such thing as a 1099 employee. That’s a made-up, imaginary term for a classification that does not exist and is in fact illegal.
You are either an employee (in which case you enjoy the rights and benefits provided to employees by law) or you are a 1099 contractor, which (again) is just another name for independent contractor and means you are in business for yourself and as such are responsible for all the duties, taxes and reporting obligations that entails.
This is where the problem starts because most of these workers do not understand the difference and the legal and financial implications involved. They don’t realize that when they allow an employer to call them an IC, they just became self-employed business owners.
That’s not what most of them bargained for. Most aren’t fully aware of all the rights and benefits that they are deprived of in the process.
What this also means is, even if a company classified you as an independent contractor (even if you signed a contract), the law may still consider you an employee. The law does not uphold contracts that are illegal in the first place.
What Is an Employee?
An employee is someone who works for a company in exchange for a paycheck.
Being an employee or independent contractor isn’t something individual employers get to arbitrarily decide.
There are legal standards and definitions about what constitutes an employee, control being first and foremost.
As an employee, the company you work for has the right to dictate (among other things) your work schedule, hours, pay, where you do the work, what equipment to use, and when, where and how to do the work. (When you are an independent, self-employed business owner—in other words, independent contractor—clients MAY NOT dictate ANY of that whatsoever. YOU are the one who decides your fees, when, where and how you will work, what you will and won’t do, etc., and you do NOT “report” nor are you managed by clients in any way, shape or form. The only thing a client has the right to convey to you is what they would like accomplished, what outcome/result they desire for the work to produce, and what their timeframe/deadlines are.)
As an employee, you are supervised and directed by your employer who requires you to report to them and turn in timesheets. You may also be required to undergo training at the company’s direction.
If a company exerts any measure of control and management over a worker, that worker is an employee (and must be lawfully classified as such).
Likewise, if the workers ARE the very product of the biz (as is the case with temp agencies, staffing agencies, virtual staffing agencies, etc.), they must be classified as employees.
In exchange for this luxury and privilege of control and the benefit that is gained therefrom, an employer is held to some legal and financial obligations and requirements.
How Are Employees Paid?
At the start of employment, an employee completes an IRS Form W-4.
The employee is then given a paycheck in exchange for their work at the usual established company pay cycles and in accordance with local, state and federal laws.
By January 31 of every year, the employer is then required to provide the employee with an IRS Form W-2 Wage & Tax Statement which summaries the total monies you earned the previous year, the amount of taxes that were withheld from your pay, as well the employer-paid half of your FICA taxes (Social Security, Medicare, FUTA) and any other particular taxes (eg., unemployment) as may be required by local, state and federal law.
I highlight that last part because this is what many people don’t understand.
They don’t realize that when an employer illegally misclassifies them as an IC (self-employed independent contractor), that employer is essentially stealing from them.
Those are rightful monies owed to you that they are legally required to pay when you are an employee according to the legal definition.
What that means is that by illegally misclassifying you, they are shifting 100% and more of those costs onto you instead of paying their legally-required share.
Understanding Employment Taxes
Everyone who works and has earnings must pay FICA (Federal Insurance Contributions Act) taxes.
FICA consists of 12.4% Social Security tax (up to whatever a given year’s wage cap is; for 2014 the cap was $117,000) and 2.9% Medicare (there is no wage cap on Medicare tax; however, beginning in 2013, if an employee earns more than $200,000, there is an additional 0.9% Medicare surtax that must be withheld from their wages).
If you are an employee, 6.2% Social Security and 1.45% Medicare tax is withheld from your paycheck, and your employer must pay the other 6.2% Social Security and 1.45% Medicare taxes.
FUTA (Federal Unemployment Tax Act) is another tax that must be paid, which is 6.2% up to $7,000 in wages. This tax is paid 100% by the employer. If you are an employee, there is no employee portion to be withheld.
If you are an employee who has been illegally misclassified as an IC, this is more money that is rightfully due to you that the employer is cheating you out of.
FUTA, in conjunction with state unemployment insurance systems, provides for unemployment compensation to workers who have lost their jobs.
This is another of the rights and benefits that an employee enjoys that an independent contractor is not eligible for.
Why Do Companies Classify Employees as Independent Contractors?
Why do they do anything? Because of the money.
Employees cost a business a lot of money. And I don’t mean only in terms of pay.
Besides their benefits and pay, it costs a lot to manage them. Taxing and reporting responsibilities must met. There are employee rights and labor laws that must be observed and complied with.
Compared with all that, it’s easier and cheaper to work with ICs than it is employees.
So a lot of companies will think, “You know what? We can’t afford these employees. Let’s call them independent contractors instead.”
But here’s the problem with that: it’s illegal.
The legal phrase is “illegal missclassification of employees.”
They don’t get to have their cake and eat it, too. Not when it cheats those workers out of their lawful, rightful employer-paid taxes and benefits.
If they don’t want the cost and headache, then they have to give up the control.
And if they don’t want to give up the privilege and luxury of control that comes with beck-and-call employees, then they have to comply with the law.
That’s just how it works, folks.
Companies don’t get to decide at their whim whether to classify someone as independent contractor just because it’s cheaper and more convenient for them.
The second they start exerting the control of an employer over a worker, that worker becomes an employee.
What to Do if You Feel You Have Been Misclassified as an Independent Contractor
As I said before, even if a company you have worked for classified you as an independent contractor, even if they had you sign a contract, the law may still consider you an employee if that company exerted any of the control that only an employer is allowed to exert (see Independent Contractor or Employee?)
The first thing to know is that it is 100% the company’s duty and responsibility to properly classify workers. The worker is never responsible for this.
I mention this only because many workers worry about taking recourse for fear the law will come down on them, and that is not the case.
Keep in mind that if you were an employee missclassified as an IC, you were missing out on all the usual rights, benefits and perks afforded regular employees of the company that ICs are not eligible for such as : unemployment benefits; worker’s comp benefits; severance pay; workplace rights such as minimum wage, overtime pay, sick pay, rest breaks, vacations; healthcare coverage under the Affordable Care Act.
The law may determine that you were entitled to those as an misclassified employee.
And if you worked for a company that closed up shop and left you high and dry, you’re going to want those unemployment checks.
The good news is that you have nothing to lose by looking into these things and possibly a lot to gain.
If you were feel you were misclassified as an IC, one of the simplest things you can do is fill out an IRS Form SS-8. The IRS will do the rest of the work after that. If they find that you were misclassified and should have been an employee, it’s the employer who is on the hook any penalties and back taxes you were deprived of.
If you’re young, it may not mean much right now, but when you get older and near retirement age, those retirement funds and medical benefits become more real and relevant to you. No matter what your age, those are accounts you should be concerned about and attentive to. They are part of your rightful benefits.
Another way a lot of these misclassifications come to light is when people file for unemployment insurance.
Yes, even if you were told by the company that you were an independent contractor, even if you signed a contract, I encourage you to file for unemployment insurance.
Once you do that, they will also examine the relationship and make a determination. If they find that you should have actually been classified as an employee, it’s the employer who will be liable for those benefits and back tax payments.
And, talk to a local employment law attorney. Because I am not one and I don’t want any of this information to be construed as legal advice. I only share this information to point you in some directions where you can get the full information and advice from the proper agencies and legal advisors.
That kind of attorney can better and more fully explain all the ramifications of being misclassified as an IC, what benefits and rights you may have been deprived of, how long the statutes of limitations are in your case, the recourse and remedies available to you, and what the next best steps are.
There may even be, as we speak, some attorneys or law firms working on some kind of class action.
Armed with this information, you can be more knowledgeable of your rights and how things are supposed to work should you decide to work with another company similar to Zirtual.
If you work for anyone who dictates any of your working conditions to you, you know now that you must be classified as an employee, that there are employer-paid taxes and other employee rights and benefits that are your right.
And if any employer exerting a level of control over you tries to tell you they are going to start paying you as an IC, you can say:
“Hold up! Not so fast! That’s not correct. People who are in business for themselves as ICs, know they are in business for themselves. Last I checked, I don’t recall starting a business, and I am not in business for myself. You are exerting a level of control over my pay, schedule and work conditions that constitutes employment. As such, I am an employee and must be paid accordingly, including all the rights and benefits afforded to employees. If there’s any question about that, we can have the IRS make the determination.”
Okay, I’m being a bit snarky, lol. But you get my drift.
Now that you are better informed, in whatever pleasant or diplomatic fashion is your preference, you can be more assertive and point people in the direction of the resources I have linked throughout this post.
If you have any questions about any of this, I am happy to answer and help in any way. Please post your questions in the comments.
And if you are in a former Zirtual worker, I understand several groups have been started to support each other.
I would be happy to speak to your group, either by phone or online, and help shed further light and answer any questions you may have about any of this information about employee classification.
Likewise, if any of you are interested in actually starting your own business (otherwise known as self-employment, being an independent contractor), I can definitely answer any of those questions as well. As a business owner since 1997 and the founder of the Administrative Consultants Association, that is my specialty!
RELATED ARTICLES: The topic of subcontractors is another important area for people in business to understand. I have a whole category on my blog that covers subcontracting:
Should I upgrade to Windows 10? —TM
This seems to be the topic of the day lately for all us PC users.
And really, it depends. There are so many variables to consider.
A lot of it boils down to personal preference and your own business circumstances.
Although this is more of a technical question (I focus mainly on business operating and marketing principles here), there are definitely some business implications so I’ll share my thoughts.
First and foremost, talk to your technology people.
(Don’t have any? Get some! This is one of the important support relationships to have in business.)
In my business, I call on my “computers guys,” a local father and sons computer and IT business who have been my go-to fixers and advisors on all things computer-related for many years now.
When I asked them about ugrading to Windows 10, here’s what they advise:
“Reserve your free copy, but don’t install it. All new software is buggy, and this one is no exception. We recommend everyone wait for at least six months when a lot of the initial bugs and problems will likely have been identified and fixed.”
As you weigh this decision about whether or not to install, a couple other things to take into account are:
- How old is your computer?
- Do you have the system requirements for an upgrade to 10?
- If you upgrade, will all your other software and tools you use regularly still work or will you have to upgrade them as well?
- If you install and then have problems, how will that impact your client work and turn around times?
I’ve been hearing horror stories from clients and business associates who upgraded to 10 right away.
I’ve also heard from other people who think Windows 10 is awesome and have had no problems (so far, anyway, lol).
There isn’t a one-size-fits-all answer.
Personally, I never install new software right off the bat.
I have too much work to do to deal with the aggravation and time-suck of computer problems and learning curves that are easily avoided by simply waiting a bit longer.
I know from experience that it takes working with things more in-depth before any issues/bugs raise their ugly heads. And that’s usually at the most inopportune time. I have a fast-paced practice and the last thing I need are computer problems stopping everything up.
Plus, I never upgrade right away to the latest (and the “latest” is not necessarily the “greatest” to be sure) because my clients rarely do, and it causes difficulties/incompatibilities in a lot of ways when you are ahead of your client curve.
In fact, you may be surprised that up until a couple weeks ago, I was still running XP and Office 2003/2006 on my primary workhorse computer.
Don’t get me wrong. I’m not a technophobe in the least. Far from it. You can’t be in this business.
And I have always had all the new stuff on my laptops.
But bad design is bad design.
I just don’t like anything Microsoft redesigned after XP so I kept it on my main computer. If it ain’t broke, there ain’t nothing that needs to be fixed. 😉
It’s like this: Just because something is “popular” and “everyone is doing it,” doesn’t make it good.
Likewise, just because something is new, doesn’t make it good.
But technology marches on and the day finally came that I was forced off my beloved XP and Office 2003/2006, lol.
Now, I have Windows 8.1 on everything and running Office 365.
I am probably going to install 10 on my least-used laptop just to see what it’s all about.
But I most likely will not install 10 on my main desktop work computer for another couple years when I have a new computer built by my “computer guys.”
All in all, in deciding if now is the right time for you to upgrade to Windows 10, take this into consideration as well:
Are you newer in business and have few or no clients? Then this might be a great time to bite the bullet and see what happens.
Because if you do run into problems, they won’t have a big impact and you have more time on your hands to deal with them.
However, if you have a busy client roster and workload, you don’t have the same kind of space to deal with computer issues.
If you can’t afford the time, aggravation and downtime that potential computer problems may cause in your practice, I would say slow your roll and give it another six months.
There’s no reason you have to rush into anything right this second. Windows 10 will still be there and in far better shape than it is right now.
And if/when you do upgrade, be sure to check out all the useful Windows 10 articles I’ve pinned for you that will help you learn all about the new features, tweak your settings and make the best use of it in your practice.