Today’s Biz Ladies post comes from Erica Cosminsky, an HR business strategist who works with small business owners. Every day, Erica offers strategies and advice for growing small businesses, and today she shares some of her knowledge on maintaining a home office with outside employees. Thanks, Erica, for this helpful advice! — Stephanie
Read the full post after the jump . . .
Even if you work from home as a professional crafter, a business coach or a designer, eventually you will need help in a growing business. You may not need an “assistant,” but you may need another set of hands running a sewing machine or cutting things out. Or you might need a nanny to keep your kids. (I use the word “assistant” interchangeably with personal assistant/sewing assistant/nanny/etc.) So what do you need to know before you bring someone into your house to work?
1. Cleanliness Is Next to Godliness
My first suggestion before you hire an assistant to come into your house is to hire a housekeeper or an assistant who will also do housekeeping chores. Hiring an assistant is to help you, not stress you out more. Remember, most people will understand kids’ toys on the living room floor, dishes piled up and food unswept on the floor . . . well maybe you do need to clean that.
If you are inviting an assistant into your house, you will both be more comfortable if you set boundaries. If you are fortunate enough to have an office with an external entrance, make sure they know to come in that door. It will make them more comfortable if they know where they can put their lunch or which bathroom they can use. Even saying that it’s ok for them to use the microwave or stove can make them more at ease, rather than feeling like they have to eat a ham sandwich in their vehicle.
3. Escaping Pets
Be forward about animals in your house. You may think your cat is the most adorable in the world, but your new assistant may not like playing couch. I always make sure my new assistants and interns are not allergic to my cats. I’m extremely allergic to dogs, so being in a confined space with one would be a sad surprise for me.
4. Not the IRS!
Many of my coaching clients come to me concerned about whether the person working in their house is their employee. This is a special IRS classification for “household employees.” Housekeepers, babysitters/nannies, landscapers and home business helpers could be considered employees. Here are the key things to note:
- If you control what the worker is doing, and how they do the task, they are an employee. Example: You hired a personal assistant and require him/her to be at your house from 8 a.m. to 5 p.m. and to answer the phone with a certain script.
- If you provide equipment for the worker, they are an employee.
- What if my sewing assistant brings her own scissors and tools but uses my sewing machine occasionally rather than lugging hers around? You probably can get away with this. Read below about Contractor Agreements.
- My interior design assistant has most of her own equipment but lacks a key item she can’t afford. She has a business license of her own and wants to retain the ability to work with other clients. Can I buy her the equipment item without her suddenly being classified as an employee? Make sure that the item you are purchasing is given and written off as a gift that you will not be using or requiring her to return to you. Retain your receipt for tax purposes.
What does a contractor look like then?
- If you hire a landscaper who brings his own equipment and pays his team members, as well as provides services to other homes or businesses, they are a contractor.
- If your worker sets their own hours, they can be classified as a contractor if they control how they work and provide their own equipment. Many contractors will let you know, “I plan to be there by 9:00.” If your contractor tells you they will show up and they don’t, that’s a problem. But if you consider them a contractor and they are six minutes late, you can’t punish or fire them as you might a corporate employee.
- If you consider your worker a contractor, make sure you have a Contractor Agreement drafted and signed. A contractor may include items that say that the contractor is free to leave at any time between projects. It may also include timelines for tasks to be completed. You cannot require them to arrive and leave at a certain time, but you can give them a two-week window to do ____ task. If you are using a vendor, such as an exterminator, they will give you an invoice or a contract.
5. Teenage Consideration
Fortunately, the drafters of the Household Employee and Nanny Tax realized that many teenagers babysit and have odd jobs for their parents, neighbors or relatives. If all three items below are met, the teenager is exempt from employer and self-employment taxes:
- The employee is under age 18 at any time during the year and
- The work is in or around a private residence as an employee and
- The employee’s main occupation is not providing household services. (For a teenager, their primary occupation is to be a student, not a babysitter.)
My last bit of advice on in-home assistants: It may seem like an easier job for someone to work in your home, but remember that it’s a different situation entirely than working in an office building. Finding the balance between formality and casualness is vital.