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Employees vs. Independent Contractors

bctrainers Posts: 2 Joined: 2002/01/31	2002/02/08, 10:13 AM Hey Gang, I was wondering if anyone out there owns a Personal Training Studio and has trainers that work for them. My wife and I own a studio and still find ourselves vacillating back and forth over which way to classify our trainers. Currently they are Independents. I understand the IRS's classifications of independents vs. employees, and that is a concern as well. You have more control with employees, but I found that the taxes and workmans comp were eating up all my profits. I'm also concerned with the issues of loyalty, pay schemes, sharing information that I've developed, etc. If anyone would like to share some thoughts or experiences on this subject it would be greatly appreciated.
rpacheco Posts: 3,770 Joined: 2001/12/13	2002/02/08, 10:51 AM There are obvious advantages to retaining contractors as opposed to employees. However, all of the IRS acid tests must be met (i.e. contractors can set their own hours and cannot be "directed," etc.). I have seen some small businesses suffer because they did not interpret the IRS classification correctly and were ordered to pay back taxes. As far as your fear of contractors sharing information, you could develop a legal document that includes a non-compete clause, non-disclosure of "trade secrets" and a hold harmless clause for the improper training methods that could be employed by the contractors. There's so much more to consider. If you would like more insights on this, e-mail me here at ft. -- Robert