So I mentioned a little bit about this on our website, but I wanted to go more in-depth here so current and prospective clients can understand a little better why I make such an effort to educate people on the distinctions.
We use actual employees, by which I mean they receive W-2s and are paid an hourly rate. We cover a percent of their taxes and provide benefits. Historically, a lot of pet-sitting companies have used independent contractors and they typically pay them a percentage of the service performed.
However, as anyone who has ever lived can attest, just because that's the way things have always been done, does not make it the best option.
The reason some companies use independent contractors, frankly, is so that they can cut costs on payroll taxes. I disagree with this model for a lot of reasons.
One of the biggest reasons: the IRS considers this tax fraud. Now, controversial take here, but I'm not of the opinion that building a business upon tax fraud is a great business model.
The IRS has a few qualifications for determining whether a worker is an independent contractor or an employee.
The first is behavioral. Independent contractors should be "independent" and set their own hours.
Can you take time off whenever you would like?
Do you set your own hours?
Do you choose which assignments you would like?
Are you trained in any way?
Does the business have a say in how the worker does their job?
Second, financial. Who provides supplies and controls payment?
Do you set your rate?
Do you provide invoices to the company contracting your services?
Are you provided supplies?
Third, relationship. An independent contractor typically should not be providing the main service of the business.
Is there a contract between the two parties?
Is the relationship temporary?
Businesses that are using independent contractors as their primary workforce most likely can't stand up to these tests. Typically, these businesses are so small that they have evaded the IRS's gaze. But, if a disgruntled employee filed form SS-8 with the IRS, said businesses should maybe expect an audit.
A legal instance of me using independent contractors for my business would be if I were to say, go on vacation, and I contracted another dog sitting company to handle my clients. The relationship is temporary, the contractor has their own business, their own insurance, and decides their own price.
Now, why is this important? For one, it creates an unfair business environment for those of us with law-abiding businesses. We take on a lot of added expenses to keep actual employees and now we have to compete cost-wise with businesses that don't.
It's also incredibly unsafe. The business cannot use its insurance to cover its independent contractors. The contractors must have their own insurance. The independent contractors legally cannot be trained by the business in any way. Independent contractors are also allowed to "sub-contract" their work. The business loses control over who has access to your home and the independent contractor can essentially outsource their job.
Furthermore, it is incredibly disrespectful to their workers. The "independent contractors" lose benefits they should legally be entitled to as employees, such as: worker's compensation, overtime, and paid time off. It opens the business up to a lot of liability issues and should suggest that that business cuts a lot of corners.
Here are some questions you may find useful when interviewing prospective pet-sitting companies:
Do you use independent contractors or employees? If you use independent contractors, how long are they contracted for?
I just spent a whole blog post on this one so I'm sure you understand why it's so important by now.
How long do your walkers typically stay with your business?
A high turnover rate is usually a sign of a not-very-good management system and business culture. If a company is changing walkers every month, the walkers they send are most likely not going to be well trained or trained at all.
What training procedures do your walkers go through?
We have our employees go through pet first-aid courses and pet-sitting courses provided by Pet Sitters International. Additionally, we like to use the Karen Pryor Academy course to teach employees the foundations of positive reinforcement training. We also study materials by Dr. Dunbar's Dog Behavior and Training Academy and the Grisha Stewart Academy.
What safety measures do you take?
This one is really important if your dog has some "quirks", like aggression with other dogs or strangers coming in the house. You want to make sure the dog walker is qualified to handle your dog and you will not run into any liability issues. You want your dog to be set up for success, not a rotating door of walkers that could potentially exacerbate issues.
In short, I would like to spread awareness and education on the dangers of worker misclassification. I've come to the unfortunate realization that it's a very serious and very widespread issue. I take a lot of pride in my job and my industry. It can be a tough job, sometimes working long hours in all types of weather. Everyone should be entitled to fair compensation for their labor. We should strive to lift each other up and not use others for our own profit.