Freelance Workforce Management

The #1 question I got from clients in 2022 is the #1 question I’ve gotten from clients so far in 2024: “Should my 1099 contractors really be my W-2 employees?” I love HR compliance because it’s generally black & white … but the guidelines for properly classifying your workers are as grey as storm clouds. Still, the US Department of Labor recently announced new (in this decade, anyway) guidelines to help business owners (and their favorite HR consultant) figure out who can be an Independent Contractor and who should be a W2 employee. I still prefer “black & white” … but I do appreciate guidelines, too! Going into effect on March 11, the new Independent Contractor rule under the DOL’s Fair Labor Standards Act outlines six factors to consider when properly classifying workers.  This “Economic Realties Test” – where a business leader determines whether a worker is either economically dependent on an employer for work, or is in business for himself — is a departure from the current DOL guidance, so I want to tell you all about it. But first … Here’s a crucial insight that really hit home for me: recent data from the National Employment Law Project (NELP), indicates that a significant 10-30% of us might be misclassifying our workers as independent contractors. I get the urge to cut costs, and it’s clear that classifying workers as contractors might seem like an attractive way to save money. I also have several clients who’ve told me that their contractors refuse to become employees. Does that sound familiar? Classifying your workers isn’t just a mutual decision you make with them – both the DOL and the Internal Revenue Service care very much if you pay someone as a “contractor” when they really fit the mold of “employee.” Employees are covered by employment laws that create a safety net against unfair practices, discrimination, and workplace harassment - and bestow mandatory benefits like retirement plans, paid sick, leave, health insurance, and worker's compensation insurance. Contractors don’t have these safeguards – and the government is wary when workers aren’t properly protected. So at-a-glance, here is the new Six-Factor Economic Realities test form the DOL:   1️⃣ Opportunity for Profit or Loss   2️⃣ Investments in Equipment     3️⃣ The Degree of Permanence 4️⃣ The Degree of Control 5️⃣ Essential to the Employer’s Business 6️⃣ Worker’s Skill and Initiative    Got a question or want to talk through the classification of your own workers before March 11?  Hit me up for a free 20-minute consultation so we can get this right, together! I'll put the link in the comments. #hrcompliance #humanresources #management #departmentoflabor #independentcontractors

I’ve hired 50+ freelancers and contractors in the last 6 years. Here are some of the most important lessons. 1. Finding “freelancers” is easy, and how to find them is the wrong question. Finding the right freelancer for your need is the challenge. 2. You need to onboard them as if you were hiring them full time. Show them the systems, get them access to everything they need, help them get to know your tone and voice and requirements. Don’t just let them do “whatever they do for others.” Your needs are always a bit unique! 3. Manage them like a teammate. Give them feedback, give them targets, hold them to hitting their numbers. 4. Pay them like you’d pay an employee (on time)! It’s amazing how people say freelancers don’t want to work for them, when the freelancer is getting paid late and basically paying to get compensated! 5. Mostly hire freelancers when you’re committed to eventually hiring someone full-time in that role. Hiring freelancers to test out new ideas doesn’t work well, because they’re not invested enough to really make it work for you. Hire freelancers for the proven things so you can innovate with new things yourself. I hope that’s helpful for someone. What did you learn or have you learned about hiring freelancers? What would you want to know from my experience? Leave a comment 👇

The DOL has spoken, folks, and let's just say their new ruling on worker classification is as clear as a frosted window. But don't you worry, I've gone all HR and here's what I've uncovered for all of you scratching your heads out there.   ⚖️ At the high level, the 2021 guidelines were pretty company-centric, like a strict parent saying “when, where, and how” to work—if that was your script, you had employees on your hands. Fast-forward to 2024, and it's a different story. We've got the "totality test" now, featuring a six-factor ensemble to determine who's who in the employment relationship.   A Few Main Takeaways to Chew On: **reminder this is a totality test so you have to look at the whole picture! - 💡 Impact on Profit and Loss: Think of it this way—if a person's got the managerial role to boost their earnings (hello advertising and hiring), they're leaning towards independent contractor status. But if their only ticket to more cash is more hours, employee status is probably where they're at. - 🚚 Investments: It's all about scale. Does the person's investment make a splash in the business pool, like a single truck owner versus a corporate fleet? That's the independent contractor vibe. If they come armed with just their lunch and a pencil, it's more "employee-esque." - 🔑 Integral to the Business: Ask yourself, "Can my business run without this person?" If it’s a "yeah, no problem," then independent contractor may be their jam. But if it's a "no way, they’re vital," then you're looking at an employee. Picture a factory setting—the machine operator is an integral cog (definite employee), but the plumber fixing leaks? Not so much (independent contractor).   So, what’s the game plan? 1. 📖 Dive into the ruling like it's a good novel. Get cozy with the new ruling and do some homework on your team. Knowledge is power, and it might just spark some lightbulb moments. Your very own cliff notes will highlight the gray areas begging for attention. 2. 🤝 Consult with an employment lawyer AND an accountant. wo heads are better than one, especially with new laws on the line. 3. 📜 If you’re set on the independent contractor track, draft a crystal-clear agreement. Make sure it covers the relationship nature, tool and resource expenses, and all that jazz about taxes and insurance.   It's a new day, a new rule, and time for some new strategies. While not the most exhilarating topic…. This can make or break your company in 2024 so do your due diligence! #DOLUpdates #EmployeeVsContractor  

Success in hiring a freelancer has to do with WAY MORE than just the person you hire. I've hired 20+ freelancers over the last 2 years for my own 3 businesses, in addition to seeing thousands facilitated by our platform. It's not only who you hire, it's HOW you hire and manage them. Here are 6 tips on how to ensure successful freelance hires: 1) Do Paid Sample Projects There's no substitute for actually working together. Budget $300-$500 for a paid sample project for your top candidate (something that you'll use), and see how they perform. If their work blows you away, make the hire. If it's just "okay", then don't. 2) Work Asynchronously One of the biggest reasons freelancers love being freelancers is their schedule flexibility. Don't bog them down with unnecessary, recurring meetings and they'll do their best work for you (and bill you less hours). 3) Pay Well & On Time Freelancers are stressed about 2 things on a daily basis: 1 - Getting work 2 - Getting paid You have full control over number 2. Don't squeeze them on their rate, and pay invoices as soon as you get them. It'll pay dividends in the work they do for you because they LIKE working for you 4) Align on Long-Term Expectations in Advance There's nothing worse than onboarding a freelancer and them having to roll off after 6 months due to a personal or professional comittment. Be upfront about how long you expect to want to keep them for, and whether or not a full-time role is a possibility. Make sure you're both aligned on those long-term expectations. Of course, things can change, but it's always helpful to align in advance no matter what, and communicate if/when things do change. 5) Avoid Surprise Bills A brand's biggest nightmare is getting a bill 5x what they thought they were going to pay for an hourly project. But they rarely do anything to prevent it in advance. Sign a contract with ALL freelancers you work with, no matter how small the project. And if you're working together on an hourly basis, make sure to put a CAP on the number of hours they can bill for a given project, week, or month. Anything more should require written approval. 6) Provide Timely & Honest Feedback This is a no-brainer for full-time hires, but brands seem to leave it out with their freelancers. Not happy with the quality of work? TELL THEM. Not happy with communication or turnaround time? TELL THEM. They can't do better work for you if they don't know where they're not meeting expectations. Share feedback, live or asynchronously (criticism is best shared live), on an ongoing basis, and make sure to let them know when they're crushing it as well. *** I've hired super talented freelancers in the past, but the engagements haven't gone well, because I left out one of these 6 steps. Once I started following them religiously, my success rate shot up. I've only made 1 bad hire in the last 18 months (90%+ success rate). Try them out and let me know how it goes.

Today most companies combine three types of work forces. 1)   A full-time employee, 2)   A full-time or part-time contracted employee from another firm (e.g., Wipro or Cap Gemini) 3)   Free-lancers (directly or via an intermediate firm) Full-time employees are usually the backbone of any company and its culture with contracted and free-lancers being mixed in to expand expertise and manage oscillating workloads in a cost-effective manner. We may now want to think of a fourth type of worker to reflect the forces of technology, shifting demographics and new mindsets: The Fractionalized Employee. Imagine if one could get both the continuity and loyalty of a long-term employee with the flexibility of cost management of a part time employee and the expertise of a free-lancer and do so in a way that both grows employees and retains them in the long run. Every employee in the company is given a choice to work 100%, 75% or 50% of their time. They get to select this at the beginning of every year or can adjust to a different level when a life event occurs No longer does an employee have to choose between staying or going or being torn trying to do two things at one time. If they wish to try out a different type of non-competitive job it behooves their employer from letting them do so because retaining half or three quarters of a talented person is better than zero. As importantly these external skills or vocations will make the employee better rounded and probably more productive. And there will be cost savings from both reduced compensation but also eliminating the friction and cost of severance, re-hiring, and training. And as AI makes companies realize they need to change, adapt and manage new talent mixes, fractionalized employment allows for a smart way to manage costs by dialing down employee cost while ensuring the dignity of continued employment, the security of continued health care and the enablement of those employees using the non-employment time to earn revenue or build new skills for an AI age or take care of personal needs. This will not just retain talent but attract new talent including the more seasoned who might only want to work half time. For the employee they do not have to give up an income stream, health benefits or a part of their identity to build new skills, pursue new horizons or take care of life’s events. The Fractionalized Employee model will allow companies to retain talent, grow talent, mix, and match talent in ways that are truly win-win. Employees gain greater flexibility, optionality, opportunity for growth, managing life stages, and time to build additional expertise. Employers can attract new types of talent, retain stars, elongate the careers of seasoned experts and long time employees, calibrate costs in humane ways that do not negatively impact culture, and enhance adaptability to changing circumstances. https://lnkd.in/gt_WypB8

If you’ve ever wondered what the key difference is between handing out a W-2 or a 1099, here’s the scoop: ◈ W-2 Employees: These are your dedicated team members who commit to a set schedule and perform work under your direction. They often receive benefits like health insurance, paid time off, and retirement plans. Taxes are withheld directly from their paychecks, with the employer contributing to Social Security and Medicare. In short, W-2 employees are a solid part of the company structure with specific rights and protections. ◈ 1099 Independent Contractors: These professionals are hired for specialized tasks or projects, retaining control over how, when, and where they work. Unlike W-2 employees, they aren’t on the payroll, don’t receive benefits, and are responsible for handling their own taxes, including the self-employment tax. They offer flexibility and expertise without long-term commitments, making them ideal for specific, short-term needs. Why does this distinction matter? Because misclassifying workers can lead to some major compliance issues, not to mention surprise fines and back taxes. Getting it right from the start? That’s the peace of mind every business owner needs. 💡Pro tip: If you’re unsure, focus on who’s calling the shots. If you set the hours and control the process, they’re likely a W-2. If they’re flying solo and setting their own schedule, you’re looking at a 1099. Have more questions? Or maybe a story about handling these forms? Drop it in the comments – let's help each other navigate this tax terrain! #SmallBusinessEssentials #TaxCompliance #bethechangeHR #HR #HumanResources #HRConsulting

This time of the year, a lot of people are surprised when they get a 1099 instead of the W-2 they were expecting. First, when you are completing hiring docs, an employee completes a W-4 and a contractor completes a W-9. If you completed a W-4 and receive a 1099, notify your employer that you should have received a W-2. If you completed the form that matches what they provided (employee = W-4 and contractor = W9), but you do not feel that you should be receiving a 1099, take this short test that makes the decision for you: The ABC test is a legal standard used to determine whether a worker is an independent contractor or an employee. While the specific criteria can vary by jurisdiction, the general principles of the ABC test typically include: 1. **A - Autonomy**: The worker must be free from control and direction in the performance of their work. This means that the worker operates independently and is not subject to the employer's control over how they complete their tasks. 2. **B - Business**: The worker must be engaged in an independently established trade, occupation, or business. This indicates that the worker has their own business setup or is actively operating a business separate from the employer. 3. **C - Customary Trade**: The services provided by the worker must be outside the usual course of the employer's business. This criterion assesses whether the work performed is not a core part of the employer's business activities. If a worker meets all three criteria (A, B, and C), they are typically classified as an independent contractor. If they do not meet one or more criteria, they are more likely to be classified as an employee. There are state and federal penalties for misclassifying an employee as a contractor.

You hired a freelancer to help drive growth. Instead, you got burned. → Missed deadlines. → No clear strategy. → Wasted budget. The worst part? You had to explain it to your team. You vouched for this hire. You fought for the budget. You expected results. But there were no clear KPIs. No roadmap. Just vague ideas and incomplete work. You kept giving them one more week. Then another. Until it was too late. The team lost trust. You lost momentum. And in the end, you said it out loud, “I’m never hiring a freelancer again.” But here’s what you learned the hard way: Freelancers don’t bring strategy. They follow direction. When the direction is vague the output is weak. You can’t plug freelancers into chaos and expect clarity. You need systems. Goals. And ownership. Otherwise, it’s just money lit on fire. Here’s a guide I now follow to set scope for freelancers: ✅Define the outcome first: Not tasks. Outcomes. Example: “Generate 20 SQLs per month from paid LinkedIn campaigns.” ✅Assign a single point of contact: Freelancers can’t navigate internal politics. They need one person to approve, unblock, and guide. ✅Set measurable KPIs with deadlines: Don’t say “Help with content.” Say “Publish 4 SEO-optimized blog posts/month that rank for "this topic" within 45 days.” ✅Agree on a weekly check-in rhythm: Async doesn’t mean hands-off. You need a 30-minute sync to stay aligned and adjust quickly. ✅Document everything: Scope, timelines, KPIs, escalation paths. Assume nothing will be remembered. ✅Create a kill switch: A 30-day review clause. If KPIs aren’t trending the right way, cut ties fast. Your team doesn’t need more freelancers. They need better operator frameworks. The freelancer didn’t fail. You just handed them a foggy map and hoped they’d guess the way.

Myth: If they sign a 1099, they’re a contractor. Truth: What matters is how you work together, not the form. Three Simple Ways to Tell 1. Who’s in charge? - If you set their schedule and direct how they work, they’re an employee. - If they pick their own hours and methods, they’re a contractor. 2. Who pays for stuff and takes risks? - Contractors use their own tools, cover expenses, and risk losing money if the job isn’t done right. - Employees get supplies, a steady paycheck, and fewer risks. 3. Is it a one-time gig or part of your crew? - Contractor: project-based - Employee: working with your team day in and day out ⚡ Real-World Wake-Up Call FedEx Ground drivers wore uniforms, used company trucks, followed set routes, and scanned deliveries for FedEx. In Alexander v. FedEx Ground, the Ninth Circuit ruled those drivers were employees, not independent contractors. Why It Matters If it acts like a job, pays like a job, and feels like a job, don’t call it a contractor. Misclassification leads to big fines, lawsuits, and brand damage. Have you seen confusion about contractor vs. employee on your team? What happened? Bottom line: As you grow your team, remember labels don’t define it. Real-world details do.

They say inspiration strikes in the most unusual places—for me that would be the taxi line leaving the airport on a recent trip. One look at the queue and I knew I was better off taking Uber. Don’t worry—that’s not the great idea. But it is the inspiration. ⚡ 15 years ago, Uber capitalized on the need for on-demand transportation and created a new model that served customers better than traditional taxi companies. Right now, retailers have a similar challenge: The talent pool and workforce strategy are not matching up with market needs. What if retailers borrowed a page from Uber and used the principles of the gig economy to tackle their own staffing challenges? Why it makes sense: · Labor costs are expected to continue to rise in the next few years 📈 · Talent shortages and high turnover continue to plague retailers 🚨 · Shift planning often relies on outdated tools that need an upgrade🔧 · Retail work is becoming more complex, making placement and training even tougher 🤹♂️ · Dynamic staffing can help address peak shopping periods as well as spontaneous issues⚡ These factors have created a perfect storm for retailers. Rather than trying to ride it out, we need to get ahead of this issue. 💡 My solution: Embrace the gig economy to unlock a flexible and scalable retail workforce. How would it work? It’s a complex concept, but retailers have a functional blueprint to reference courtesy of leaders like Uber and DoorDash. Retailers could: · Model recruitment, screening, and onboarding after customer-facing gig platforms 🚀 · Assess applicants’ skills to match them with existing roles or determine training opportunities 🧑🏫 · Create a marketplace for roles and shifts, matching opportunities to workers’ skills and preferences 🎯 · Develop a rewards system to recognize efficiency, strong reviews, or positive feedback 🏆 · Offer advancement paths, enabling top performers to take on higher-level roles or participate in training opportunities 📈 I realize the gig economy has its critics—and for good reason. But let’s remember that temporary and seasonal work has always been the norm in retail. This marketplace would never serve as a replacement for a dedicated workforce any more than a temp hire would. On the other hand, adopting gig economy practices could empower non-traditional workers. It offers flexibility for those without consistent availability to secure work on their own terms. And it fosters inclusivity by providing opportunities for individuals with varying abilities, skill levels, and resources, removing some of the barriers created by rigid hiring practices. With the right approach, I believe retailers can improve on the gig economy model, creating a system that benefits companies and workers alike. What about you? Do you think the gig economy is a viable workforce solution for retailers? What other outside-the-box ideas have you considered? Share your thoughts in the comments or send a DM—let’s connect to tackle this challenge.