[lappy512]

Jon,

Wouldn't paying people as a Independent Contractor involve sending them a 1099-MISC form instead of a W2 form? Thus, they'll have to pay their own FICA tax, saving you money and hassle.

[Aletheides]

Erin it's pretty amazing that you have access to such details like that concerning the company. What a learning experience!

[JLeezer]

Originally Posted by lappy512

Jon,

Wouldn't paying people as a Independent Contractor involve sending them a 1099-MISC form instead of a W2 form? Thus, they'll have to pay their own FICA tax, saving you money and hassle.

Absolutely correct about shifting some of the tax burden to the independent contractor; hassle, on the other hand, is still involved regardless of what classification the person doing the work falls under. And the real issue here is whether the person is actually an independent contractor or an employee. There are certainly ways to design the position being filled to be more conducive of one type or the other, but care and caution must be exercised to ensure that the correct classification is actually used. The minimal amount of tax savings can easily be wiped out if the IRS comes knocking and reclassifies your "contractors" as employees...let alone the fines and interest.

Also of note, at least in the technology industry, contractors generally cost a substantial amount more than employees. There is most likely little to no real savings if you have a firm grip on your actual expenses.

[warrensway]

Salaried workers are normally bad for the company if you mix a straight salary with a commission base though it can work wonders.

[ChosenList.com]

motivation compensation motivation compensation motivation

[BusinessViking]

People will slack off or they won't and it's based on the integrity they started with and your ability to influence them when they join the organization. The 2 worlds will likely be identical for you - in that new start-up company. For established corporations there are more perks to being salaried, more power, and thus..more opportunity to abuse that power. Being salaried benefits you in that current job - and when you look for other opportunities you can then say that you have a history of hitting this number. To a new company that means: this person was trusted and valued by their previous employer and now i'm more likely to give them a shot.

Don't worry about "potential problems" they'll always be there. Just figure out how you can make the most of it. If I were in your shoes I'd be relishing were I was at: growing start-up moved to a more permanent position and talking about the future of the company with the owner? Better than any ivy league school....but I think they get really good connections. Start working on your leadership skills right now. Take full advantage of this and where you are now will be nothing compared to where you'll find yourself if you apply what you learn properly.

The world is potentially your oyster.
for everyone really.

But let's see how you do.
Good Luck.