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How to transform independent contractors into employees

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How to transform independent contractors into employees

| Architecture Hiring | April 05, 2016

First, make an architecture or interior-design independent contractor into an employee by formalizing the person’s work arrangement and paying him or her regular wages. The IRS and its interpretation of payment and work plays the most important role in deciding a person’s status. At our staffing firm for architects and designers converting a independent contractor to a full-time employee is a third of our business.
Characteristics of an independent contractor

The IRS views an independent contractor as a person who works apart from the firm, and the rules governing them are not extremely clear cut. This wide room for interpretation has led to disputes in a number of workplaces. Fortunately, the status of an independent contractor is not as ambiguous as that of intern architect or draftsman.

By definition, an independent contractor is a person who has a significant amount of control over his or her work, achieves goals independently from the firm, doesn’t need to adhere to all the firm’s rules, uses his or her own equipment and doesn’t require close supervision by a member of the firm.

Characteristics of an employee

An employee must follow the set rules of the firm. He or she receives payment through a W-2 rather than a 1099 form. An employee uses the firm’s equipment to complete jobs, has a title with the firm and is subject to supervision by a member of the firm.

The transformation from contractors into employees

4 Key Points

  1. A person’s status changes when the firm takes them under its wing. Typically, this process involves the following aspects: training, giving the person authority to make decisions for the business, assigning the person key duties to perform and redefining the person’s work status as permanent, off-probation or retained for a set period of time. The process is complete when the new employee understands their work responsibilities and begins a project on behalf of the firm.
  2. It is critical that the person understand what it means when he or she has become an agent of the firm. The best way to accomplish this task is in writing. The new architect or interior designer and the owner of the firm should sign a letter of agreement stating the worker is now an employee.
  3. You can ratify and celebrate the change in a person’s status by providing them with business cards that state their title and contact information. Having a letter signed and dated by the owner that contains a start date is also helpful and thoughtful for those changing from independent contractors into employees.
  4. Finally, it is meaningful for the firm to circulate an internal announcement that they have hired the independent contractor as a full-time employee.

 

Source list:

http://www.cons4arch.com/
http://www.aia.org/akr/Resources/Documents/AIAB095064
https://www.mbopartners.com/resources/article/what-is-independent-consulting

About the author

After working at various design practices on a full-time and freelance basis, and starting his own design firm, David McFadden saw that there was a gap to be filled in the industry. In 1984, he created an expansive hub for architects and hiring firms to sync up, complete projects, and mutually benefit. That hub was Consulting For Architects Inc., which enabled architects to find meaningful design work, while freeing hiring firms from tedious hiring-firing cycles. This departure from the traditional, more rigid style of employer-employee relations was just what the industry needed - flexibility and adaption to modern work circumstances. David has successfully advised his clients through the trials and tribulations of four recessions – the early 80’s, the early 90’s, the early 2000’s, and the Great Recession of 2007.

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