Despite the challenges that we’re facing in the economy, it is growing, and it’s growing pretty well.  Yes, supply costs are up – a lot  - and labor costs are also growing.  For a lot of businesses, though, there’s a question about how to pay an expanding work force. 

Hourly?  Salary?  Contractor?

The choice is yours, and over the last few years, the lines between hourly and salary have been blurred with several courtroom decisions. 

The digital revolution and the rise of the gig economy has blurred the lines  of employment considerably. Now, with workers able to access computers remotely, handling client calls from nearly anywhere, and having the ability to “connect” outside of an office, deciding how to staff your business is harder – and the consequences much more extreme – than just a decade or two ago. 

Let’s look at some likely examples for a growing business - should you hire on a salary, hourly, or a pay your team as contractor?  The question you need to ask is if you want to hire professionals, and managerial employees first, or if you want workers.

The truth is, if you’re hiring for white collar positions, people expect a salary and – in some cases – a clear cut statement of the hours they’ll work.  For hourly team members, yes, it’s based on the hours to be worked, and in both cases – salary and hourly – your team might reasonably expect benefits. 

You’ll also have to pay taxes, withhold them from your employees, and have a provision to manage that bookkeeping. 

…And what about contractors or “gig” workers?

It’s a slippery slope!

In general, if you have a physical structure where your team will work, and the work will be based on a specific job with different customers, and potentially set hours, then “gig” work won’t work for you.  In fact, you can find yourself in hot water pretty quickly if the Labor Department determines your contractors should have been considered hourly or salaried workers. 

Here’s the problem for business owners and entrepreneurs - your company is required to pay employees the correct amount of money for each pay period. 

This is where getting clarity AHEAD of time can really save you some grief.   I can absolutely help you in this case, but it’s also beneficial to reach out to a attorney that specializes in employment law to not only get clarity, but also, to make sure your compensation packages are legally correct. 

None of this has to be hard, but the changing nature of the various actions in litigation and the blurred lines of remote and technical workers can make things extremely difficult to sort out.

The real secret?  As with so many things, communication, documentation, and verification will keep you from unpleasant surprises, and recognize that as your company grows, you may have to modify your employment structures. 

A small business using virtual workers as a lead generation tactic may determine their results will improve with an in-house sales team in a call center, which could mean a change in how they classify workers. 

Don’t be afraid of it – it’s simply another component of growing your company!