There are two types of employment contracts that The Taormina Firm provides for its clients: employment agreements and independent contractor agreements. An employee is a person who works directly for a small business. In contrast to independent contractors, employees have certain rights, responsibilities, and privileges, including retirement benefit plans, paid medical leave, and other potential benefits offered by their employer. Some of these benefits are statutory and some are discretionary choices that you, as their employer and business owner, make. Part and parcel to an employment relationship is taking out taxes from their paychecks via a W-2 which will be issued at the end of each year.
The Taormina Firm also drafts independent contractor agreements for its clients. An independent contractor is someone who is paid by the company, but who is not under its direct control (although they do work on behalf of the company). By hiring independent contractors, the business is not responsible for providing benefits to the contractor (unless they agree to), and does not have to deduct taxes from their pay (the contractor does this themselves once you provide them with a Form 1099).
The difference between employees and independent contractors can be blurry at times. Both conduct business on behalf of the company, and both may be under the control of the company. Moreover, the business may be liable for the actions of both employees and independent contractors.
In either event, The Taormina Firm helps small business owners draft employment and contractor agreements regularly. These agreements may include provisions relating to non-competes (which are on ice right now after a recent Federal Trade Commission proposal), customer and employee non-solicitation agreements, indemnification, and other important provisions. We work closely with you to determine what contracting work you require when it comes to your employment relationships.
If you have any questions, please contact The Taormina Firm.
Schedule an appointment or take our Estate Planning Quiz