About Debbie Fledderjohann
Recognized as the industry expert for technical, professional and healthcare contract staffing since transitioning to this growing industry in 1993. The primary focus is to help recruiters make contract placements. Top Echelon Contracting takes responsibility for all the back-office tasks associated with being the legal employer of record. Experience includes all areas of human resources, financial management, accounting, payroll, state and federal laws, legal contract reviews, benefit administration, and sales and marketing for the placement of professional contractors in 49 states. Eleven years experience as a primary vendor with the Federal Government for professional healthcare contract placements. Speaker and Trainer for industry conferences such as NAPS, CSP, and Top Echelon Network. In addition to writing for various magazines, newsletters, The Contracting Corner, and a Contracting Blog.

Q&A:  How is TEC Handling New Employment Laws?

(Part three of a three-part series. Don’t miss part one and part two.) As the legal W-2 employer of record for the contract candidates that recruiters place through our back-office we are compliant on all three issues.  Below is a brief overview of our position on each. Q) How is TEC addressing the Affordable Care Act (ACA) requirement to offer medical coverage to all eligible employees? TEC offers contractors a choice of four ACA compliant insurance plans through AETNA.  Contractors can choose a traditional PPO plan or one of the increasingly popular High Deductible Plan (HDP) that offers the Health Savings Account (HSA) option. Q) How is TEC handling the Paid Sick Leave (PSL) laws that are popping up in states and cities across the country? TEC is compliant with the current states and cities that require PSL.   Each employee is provided documentation for their specific state or city as part of their onboarding process.  We also monitor and track all pending legislation for PSL around the country. Q) What is TEC’s position on Medical and Recreational Marijuana? TEC is firmly committed to a drug-free workplace. In 1970, the U.S. Congress placed marijuana in Schedule 1 of the Controlled Substances Act (CSA).  The Drug Enforcement Administration (DEA), which administers the CSA, continues to support that placement along with the Federal Drug Administration (FDA).  Twenty-three states and the District of Columbia currently have laws legalizing marijuana in some form.  While we respect every State’s right to create their own marijuana usage laws, Top Echelon Contracting chooses to follow Federal Guidelines that classify “Marijuana” as an illegal drug. The complexity of being an employer increases each month.  Consequently, the TEC team continues to educate themselves through ongoing training, attending conferences, memberships in National Organizations, and partnering with experts in this field.  We take care of the compliance issues so you can focus on recruiting and your clients can be assured the contract candidates are being offered all the required [...read more...]

Hot-Button Employment Issues Recruiters NEED to Know

(Part two of a three-part series. Don’t miss part one and part three.)  Could One of These “Icebergs” Sink Your Clients’ Ships – or Even Your Own? Everywhere you turn, you are hearing about new laws, regulations and other issues that increase the complexity of having employees. This escalation impacts you (the recruiter), your clients, and your candidates in a myriad of ways. After all, in today’s employment world, you do more than just source candidates for your clients: Recruiters play an important role when it comes to staying abreast of the changing employment world and the hot-button issues that may negatively affect employers. When people refer to hot-button employer issues, the topic that immediately springs to mind is the Affordable Care Act (ACA). It’s an important issue that affects everyone in every state, and it is the cause of numerous changes in most companies’ policies, finances, and staffing decisions. Due to ACA compliance requirements, the administrative, legal, and financial burdens on employers are getting exponentially more difficult.  Navigating these requirements is vital to the survival of any employer. However, if you’re only focused on this one issue, you may be missing the less obvious “icebergs” that could sink your clients’ ships—or, if you are running your own back-office for contract staffing, even your own. Let’s take a look at two lesser-known issues that are currently affecting many employers in 2015 and will affect more in 2016 and beyond: 1) Paid sick leave laws, and 2) Marijuana and the workplace. Paid Sick Leave (PSL) Laws The lack of mandatory PSL laws at the federal level may have left you unaware of this growing employer issue. However, this issue is making its way across the country with new cities and states being added monthly.  Currently, three states [CT, CA, & MA] have statewide PSL mandates in place, while another twenty-three states [AK, AZ, FL, HI, IL, LA, MD, MI, MN, NE, NH, NC, NJ, NV, NY, OR, PA, SC, SD, VA, VT, WA, & WV] have the issue under legislative consideration.  At the local level, twenty-two cities nationwide currently have PSL laws with a constantly increasing number of cities considering implementation. While paid time off for illness is a great benefit to employees, it is not so cut-and-dried for their employers, or for recruiters who place W-2 employees on contract assignments and run the back-office themselves. For starters, the fact that these laws mandate rates of accrual for earned PSL, accrual caps, effective dates, maximum accruals, and so forth means that employers must create PSL policies that are at least as generous as the applicable law, regardless of whether that is financially feasible for the employer. And that is just the tip of the iceberg. For a traditional direct-hire employer with one or a few locations, PSL is at a headache to track, document, and administer. For a recruiter or back-office service with employees scattered across the United States, tracking the new locations considering PSL is a herculean task.  It is a nightmare to ensure that you are in compliance with each city and statewide law and to implement a PSL system that meets all the requirements. Each law can have slightly different conditions, and compliance requirements include determining and offering the more generous of differing provisions if state and local PSL laws overlap. Paid sick leave laws are certainly some of the most complex new concerns facing employers at this time. Medical Marijuana/Legalization of Recreational Marijuana Two different marijuana-related scenarios are affecting employers: the 23 states that have legalized the non-criminal medical use of marijuana (with more on the ballot), and the legalization of recreational marijuana in CO and WA in 2014 and DC in 2015 (with OR and AK to follow in 2016). For any employer that operates in a location with legal marijuana usage, three concerns are most pressing: Medical Marijuana. Legalization of medical marijuana first began in 1996, so the specifics of these laws as they relate to the workplace have had some time to surface in the courts. Thus far only enacted at the state level, this evolving issue is most complex for multi-state employers. What are your legal rights to enforce a drug-free workplace policy? Of the jurisdictions that have legalized medical marijuana, at least fifteen do not offer any form of employment protections. In lawsuits, “the courts have held that the medical marijuana statutes in their state only protect patients from criminal sanctions and do not create any civil remedies or protections.” This means that employers in states lacking employment protections of this sort could enforce a drug-free workplace policy without much worry of repercussions, as the state supreme courts have shot down all medical marijuana-related unfair dismissal suits to date. However, employers in CT, ME, RI, AZ, DE, and IL need to be cautious, as their state statutes (at minimum) grant medical marijuana patients protected status and prohibit employer discrimination merely due to an employee’s status as a medical marijuana patient. What is your liability/risk if you terminate an employee for medical marijuana use? Even in states where employment protections are not offered, you run the risk of being sued. However, as stated above, no case of this nature has yet been successful. In most cases, it comes down to the fact that marijuana is still illegal under federal law. Employers may run into difficulties if they terminate employees for whom they had no suspicion of on-premises or on-hours impairment, as this could violate their state’s “lawful activities” statute depending on the specificity of the language. What employment decisions can you legally make based on drug screening results? If employees work on a federal contract or for the Department of Transportation, you are subject to the Drug Free Workplace Act and should continue drug screening according to the federal specifications. Otherwise, be cautious about basing decisions on test results alone. Some jurisdictions require the employer to show that the patient used, possessed or was impaired by marijuana while on workplace premises or during the hours of employment. Drug screens do not measure THC (the psychoactive chemical in marijuana), but rather metabolites, and the longevity of marijuana metabolites in the body makes determining impairment impossible. Recreational Marijuana. Employer liability relating to legal recreational marijuana is likely less serious since it is still federally illegal and marijuana is on par with alcohol in these cases. Just because it is no longer criminal in some states does not mean it is acceptable to possess, use or be impaired by marijuana in the workplace. Of the five locations that have so far legalized recreational use, at least three grant employers the right to prohibit marijuana use in the workplace. However, employees will likely raise suits to test the limits of these new laws as they pertain to off-duty usage, and time will tell what the courts may decide. (Note: The rules for federal contractors and others governed by federal policy still apply here.)  What are your legal rights to enforce a drug-free workplace policy? As long as the policy is well-communicated to employees, enforcement is consistently applied, and the necessary measures are taken to document suspicion or proof of impairment according to your specific state’s statutes, you should still be able to maintain a drug-free workplace policy. What is your liability/risk if you terminate an employee for recreational marijuana use? Again, as long as the use or impairment is on company time or premises, it is against established and communicated policy, and disciplinary measures are consistently enforced, you are within your rights to terminate based on marijuana use in the workplace. If you terminate based on outside/off-hours activity, you may run the risk of a successful suit based on “lawful activities,” depending on the state’s specific statute language. What employment decisions can you legally make based on drug screening results? Pre-employment screenings ought not to be affected. However, random screenings may get you into hot water. Due to the length of time metabolites stay in the system, experts say there is no way currently to gauge impairment from marijuana. Therefore, proving that the activity/impairment took place during work hours cannot come down to a drug screen alone. Dismissed employees will likely try this argument in the courts. One note regarding drug screening: According to the Society for Human Resource Management (SHRM), ME, MN, RI, and VT prohibit employers from terminating workers who test positive for illegal drug use for the first time. In these states, regardless of the federal or state-level status of marijuana, be careful to follow the law when drug testing current employees. Burden is Growing With the ACA a nationwide consideration, along with the rapid growth of PSL laws and marijuana legalization, the burden of being an employer is growing. It has the potential to put some companies out of business, but remember that client companies and recruiters have options: Consider outsourcing the administrative, legal, and financial details of being a W-2 employer to a back-office service like Top Echelon Contracting, Inc. (TEC).  Disclaimer: This article is for informational purposes only and should not be construed as legal [...read more...]

The Changing World of Recruiting

(Part one of a three-part series. Don’t miss part two and part three.)  It’s clear that the employment world – and by extension, the recruiting industry – is changing. There are numerous factors:  technological advancements, generational shifts in the workforce, and reverberations from the Great Recession, along with upward pressure on wages and other labor cost increases. Now we have to add in the complexity of the Affordable Care Act and other emerging employment laws.    Impact On Clients Companies are being stretched legally and financially on all fronts, but they still have deadlines to meet and projects to complete along with all the other demands of today’s economy.  To cope with this, many companies have embraced the blended workforce model in which they maintain a core group of direct hire employees that are supported by a group of contract professionals. Contractors allow companies to meet deadlines and complete projects. However, companies still need to make sure they comply with IRS guidelines for classifying workers. The IRS and US Department of Labor are pushing an initiative to ensure 1099 independent contractors are not misclassified, and a successful audit can have serious consequences. What About Recruiters? It can become overwhelming to stay on top of all these critical issues and still run a successful business.   Consequently, in addition to providing candidates, your clients look to you as a resource for industry trends, economic developments, and other changes that impact their business.  This means that as a recruiting professional, your role is changing, too. Many clients rely on recruiters for news about changing laws that will increase their employer burdens, risk, or liability, but they may also turn to recruiters for guidance and solutions regarding staffing problems. If you can provide this valuable service for your clients, you essentially become irreplaceable. This is a win-win for you and your clients. Next Week… In part two of this series, we will provide relevant information for recruiters about two looming employment “icebergs” that could sink a client company if they don’t know how to navigate these new [...read more...]

New U.S. DOL Labor Guidance: Big Implications for Recruiters

On July 15, the US Department of Labor (DOL) issued a new Administrative Interpretation detailing the “economic realities” test used to determine worker classification. This new clarification means that the majority of workers who have been justified as 1099 independent contractors (ICs) according to traditional interpretations of the Fair Labor Standards Act (FLSA) will no longer be considered such. According to the Interpretation, “…most workers are employees under the FLSA.” While the labor guidance is meant to outline the DOL’s interpretation of its own statutes and “does not have the force of law,” Lexology’s SimplyHR article notes that the courts will strongly consider the DOL’s interpretation in future legal proceedings. Therefore, employers hoping to avoid future charges of misclassification would be wise to observe the new guidelines. What are the changes? Below is a brief summary of the DOL clarification of the “economic realities” six-factor test: Is the work performed an integral part of the employer’s business? DOL Clarification: Regardless of whether the work only represents one small element of the business or the same duty(s) are completed by many other workers, an individual’s work may still be considered integral. Does the worker’s managerial skill affect his/her opportunity for profit or loss? DOL Clarification: A true 1099 IC “exercises managerial skills, such as hiring other workers, purchasing equipment, advertising for work, etc., in order to increase his profits.” The ability to increase income by choosing to work additional hours is not enough to indicate 1099 IC status. How do the relative investments in facilities and equipment by the worker and employer compare? DOL Clarification: A true 1099 IC must have made significant investments in comparison to those made by the employer, illustrating the reality of an independent business. Does the worker exercise special skill or initiative? DOL Clarification: A true 1099 IC must exercise specialized skills that allow them to operate businesses separately from that of the employer. It is not enough for them simply to possess those technical or professional skills – they must be utilized. What is the permanency of the worker’s relationship with the employer? DOL Clarification: For a true 1099 IC, a long-term, exclusive relationship with only one employer would prevent the worker from realizing a significant opportunity for profit. What is the nature and degree of the control exercised by the employer? DOL Clarification: The DOL takes the stance that many workers, particularly remote workers, may have control over large portions of their work, but this control is irrelevant in worker classification considerations unless it shows that the worker is operating a business independently from the employer. While employers have historically leaned heavily on this factor, the DOL guidance holds that “the control factor should not overtake the other factors of the economic realities test” or “play an oversized role” in worker classification. Essentially, the guidance boils down to an ultimate determination of whether a worker is economically dependent on the employer or is, in fact, operating their own independent business. Recruiter Implications What does this mean for recruiters? Several things: Recruiters can educate their clients about the new guidelines. Worker misclassification consequences can be very costly for employers, and they may need you to point it out if they are in dangerous waters. Employers that find they are out of compliance after applying the new guidelines will need to come up with an employment solution for their current 1099 ICs. Recruiters can help their clients with a solution for their dilemma: Switch misclassified 1099 ICs to contractors who are the legal W-2 employees of a back-office service like Top Echelon Contracting, Inc. (TEC). Recruiting firms may also want to look at their own 1099 ICs, if they have any, and apply the guidelines with a critical eye. Top Echelon Contracting can provide employment solutions for recruiting firms through our In-House Clerical and Administrative Program [...read more...]

2015 Talent Trends and Contracting Forecast

It’s officially July, and we are over halfway through another year. The midyear point is a great time to step back and take an eagle’s-eye look at the talent trends of 2015. In this article, we’ll examine the skills gap influencing current talent trends and the staffing forecast for the remainder of the year. Skills Gap – Top 10 Hardest-to-Fill Jobs According to the ASA Skills Gap Index for the 1st quarter of 2015, there were 181 occupations nationwide that qualified as hard to fill, an 8% increase from the 4th quarter of 2014. The top ten hardest-to-fill jobs were: Occupational therapists Heavy and tractor-trailer truck drivers Physical therapists Photographic process workers and processing machine operators Occupational therapy assistants Speech language pathologists Physicians Merchandise displayers and window trimmers Nurse practitioners Physician assistants Seven out of ten are healthcare occupations, up from five of ten in the previous quarter. This indicates that the economic recovery, along with the impact of the ACA, is tightening the talent market in the healthcare industry. Top Echelon Contracting can confirm this: we are seeing a strong interest in contract placements for healthcare professionals this year, as predicted at the beginning of the year. Healthcare made up the largest share (28%) of contract placements in 2014, and so far, 2015 looks to be no different. Looking Forward – The Second Half of 2015 The labor market looks strong for the remainder of the year, judging by CareerBuilder’s 2015 Midyear Job Forecast. 34% of employers plan to hire temporary or contract workers over the next six months, an improvement over 2014 (33%). Additionally, workers are showing more confidence and willingness to take the next steps in their careers. 29% of workers plan to change jobs in the next 12 months, as opposed to 25% last year. The top contracting-friendly industries in which employers plan to add jobs in the second half of 2015 include: Information Technology Mobile, Search or Cloud Technology Cyber Security Big Data Management and Interpretation Engineering/Manufacturing Alternative Energy Sources and Robotics Accounting/Finance Financial Regulation Big Data Management and Interpretation Human Resources Wellness (Healthcare) Recruiting TEC Trend Alert Top Echelon Contracting is seeing a trend in increased hiring of contract recruiters. This indicates that contracting will continue to maintain a strong foothold in the improving [...read more...]

7 Most Overlooked Tips to Attract New Clients – Rapidly!

Guest article by Barbara J. Bruno, CPC, CTS, CEO of Good as Gold Training, Inc. It is important for you to continually upgrade and attract new clients. Most individuals in our profession generate 75% of their sales from less than five clients. That is not recession proof and could lead to inconsistent sales and profits. Before you implement the seven most overlooked tips, conduct revenue modeling so your marketing efforts target your best business. Study where your firm has successfully made placements. When completing your marketing efforts 85% of your calls should target your best business. Seven Overlooked Tips Target thirty companies or people you have identified as the best prospects for your business. Research these targets, as well as their top competitors. You must now figure out what problems they are currently facing that you will solve. Sometimes the solution will be a direct hire placement, but it could also be a contract or contract-to-direct hire placement. Develop a follow-up process for your prospective clients. Remember, it takes six contacts to gain name recognition. Begin with your top ten target companies and contact them six times in the first nine weeks to gain name recognition. Then follow-up with a unique marketing presentation at least once a month. Less than 3% of all new business owners follow-up with prospects after three months. In business, persistence does result in more business. Each quarter target ten additional companies until you have contacted all thirty targeted companies. Write a list of your “sphere of influence”… people you know well that have influence within your community or specifically within the area of specialization or niche you are targeting as prospective customers. Call each one of them personally, and ask them to provide you with leads for building your business. Referred business is the best business. Personalize everything you do from this point on. Technology has taken the personal element out of daily activities of many businesses. Make it a practice to have at least every third contact a conversation, not an email. The day of the personalized note cards is back and will help you stand out in the crowd. Direct mail is actually working because your prospects are getting less mail. Send your sales pieces in unique containers and envelopes to draw attention to your marketing pieces and show your personality. Ask, ask, ask your current client base for more business, and referrals to other businesses who could utilize your services. Then immediately enter them in your follow-up process. Offer some type of referral bonus if their referral hires from you. Remember, people do things for their own reasons–not yours. If your current clients cannot receive payment for a referral, offer to donate to their favorite charity in their name for referred [...read more...]

2015 UPDATE – Worker Misclassification Forgiveness Program

Do your clients utilize 1099 independent contractors (ICs) who should rightly be W-2 employees? Between government audits and contractor lawsuits, this worker misclassification is becoming an ever more dangerous tightrope to walk. Even so, they may be afraid to set off IRS and U.S. Department of Labor (USDOL) red flags by reclassifying these workers properly, fearing that the fines, back wages and taxes, and other costs owed will outweigh the long-term benefits of going “legit.”  The Voluntary Classification Settlement Program (VCSP), which was established in 2011 and expanded in 2013, is a great solution to this problem. Through the program, employers who voluntarily reclassifiy ICs as W-2 employees are only required to repay a small portion of the back payroll taxes they owe. This significantly reduces the financial hardships that can keep employers from reclassifying employees correctly. The employer must meet the following criteria to qualify: The workers they want to reclassify must have been consistently treated as non-employees in the past and must be treated as such at the time of application. The employer must have filed all required Forms 1099 for the applicable workers for the previous 3 years at the time of application. The employer cannot be be under an IRS audit regarding employment taxes (other types of IRS audits are permissible). The employer cannot be under USDOL or state agency audits regarding the classification of workers. If the IRS or the USDOL has previously audited an employer regarding the classification of the workers, they will be eligible only if they have complied with the results of that audit and are not currently contesting the classification in court. Employers can apply for the VCSP by filling out Form 8952. If they meet the eligibility requirements, they will receive the following benefits in exchange for agreeing to treat the workers as employees for future tax periods: The employer will pay only 10 percent of the employment tax liability that would have been due on worker wages for the most recent tax year. The employer will not be liable for any interest and penalties on the amount. The employer will not be subject to an employment tax audit with respect to the worker classification of the workers being reclassified under the VCSP for prior years. Bottom Line Whether or not your clients enroll in this formal program to reclassify their ICs, they should conduct an internal audit to ensure that anyone who is classified as an IC meets the IRS guidelines. Another way to help your clients is by offering to convert 1099 ICs to contractors who become W-2 employees of a contract staffing back-office. Also, if you, the recruiter, have been offering contract staffing to your clients by paying the contractors as ICs, you can conduct your own internal audit and consider using a back-office to convert these contractors to W-2 employees. In both cases, the back-office takes on all the employment responsibilities, including paying the employer portion of taxes, administering and paying the employer portion of benefits (and complying with healthcare reform), payroll processing and funding, Workers’ Compensation, all state and federal tax withholdings, employee issues, and more. That way, the employer or the recruiter will still avoid the administrative hassles and additional costs that come with W-2 employees while removing the risk of an IRS audit. This article is for informational purposes only and should not be construed as legal [...read more...]

The Real “Back-Story” on TEC’s Services

Interview with Bob Small, Vice President of Carroll Technology Services, Inc.  A few years ago, a die-hard direct hire recruiter was forced into making his first contract placement to meet his client’s request. He was amazed at how easy and profitable it turned out to be, and since that first placement, Bob Small has actually become an advocate for both contract staffing and Top Echelon Contracting, Inc. (TEC). Consequently, he is often approached by other direct hire recruiters with questions about contracting and TEC’s services. Read on for Bob’s most commonly asked questions and the answers he provides.  Why choose Top Echelon Contracting? As contract staffing back-office services go, in my opinion, they are top-notch. Absolutely everything is taken care of—there is no need to worry once the contract placement is in their hands. From client communication to employee questions to onboarding to human resources to taxes and insurance—they just handle it. Doesn’t it bother you that TEC has direct contact with your clients? Absolutely not. Believe me, they can explain contract staffing placements better than you or me. They’ve been doing this and ONLY this for 23 years. They know their stuff inside and out, and their obvious knowledge and professionalism will put your client at ease. And don’t worry that they’ll cut you out of the loop—they won’t. For one thing, they DO NOT recruit. They have no interest in your client without you. They only make money when YOU [the recruiter] make a placement! For another, they understand that your relationships with your clients are your most valuable business assets and they protect them. That includes situations where a contract placement converts to a direct hire. Even in collections circumstances, TEC is careful to keep you involved and informed. What about marketing contracting to clients? Is there any support with that? Yes, they help you with it. They can create marketing documents for you with your agency name and information on them. All you have to do is send them out. As business ramp-up for contract staffing goes, it doesn’t get much easier than that. You can tell, even when you’re just getting started, TEC really wants you to succeed. How would I get paid my [recruiter] share of the profit? TEC pays you [the recruiter] as soon as the client pays them. It’s seamless. When you make your first placement, they give you access to the Statement of Contract Assignment (SCA) system. From there, you can track everything for each placement you make: timesheets, invoices, collections, etc. They do all the work behind the scenes. I love the fact that every time my client pays an invoice, I get a check in my mailbox like clockwork. What has your experience been with TEC’s customer service? It’s fantastic. You can always reach someone. If the usual person you work with isn’t available or doesn’t immediately pick up, they always have backup in place and will get you an answer quickly. You’ll never be left hanging. They are always very polite, extremely professional, and highly efficient. If you [the recruiter] screw up, they’ll cover your butt and never get on your case about it. They absolutely saved me from getting in my own way on my first contract placement– I’ll never forget that! What do you do when a contractor has questions or problems? Just give the contractor your TEC administrator’s direct extension. The Contract Administrator will always get back to them quickly and take care of the contractor’s questions about benefits, timesheets, paychecks, HR, etc. Again, they can answer tricky employment issues, like questions about the Obama stuff, better than you or me. Let them handle it professionally and promptly. If it’s an urgent human resources issue, they also have a 24/7 line for that. Bottom line – would you recommend contract staffing and TEC? Without question. Don’t avoid contract staffing and miss out like I did for years—let TEC help you tap into that income stream. They are outstanding, and it’s obvious how much they value their recruiters. Customer service is a thing of the past in a lot of industries, but not with TEC. Just work with them, and you’ll see what I mean. They get an A+ from [...read more...]

Tips for Negotiating Contract Bill Rates

(Originally posted 03/18/10, updated 06/11/15) What should you do when a client doesn’t set any limit on the hourly bill rate for a contract placement? While it might sound like a great problem to have, this can be frustrating because you have no clue what rate they consider acceptable—you have to guess. If you keep your hourly fee (a.k.a. “recruiter share”) low and ask a lower bill rate than they expect, they’ll be pleased, but you might be shorting yourself. On the other hand, select a rate too steep and you could wind up losing the contract placement and injuring your reputation. So what’s a recruiter to do? The ideal approach is to have them suggest at least a range of hourly bill rates. As long as your rate falls within their range, they can’t argue that it is unreasonable. If that tactic fails, here are some strategies that have worked for other contract recruiters: Use a standard multiplier – Multipliers usually range between 1.5 and 1.8, but they can go much higher for healthcare professionals and hard-to-find positions. Simply select one and multiply by the contractor’s pay rate to determine the bill rate. Base the rate on your target income – Determine how much you want to make per hour and then negotiate the contractor’s pay rate to determine the bill rate. If you are using Top Echelon Contracting as your back-office, you can call us to run a Quote based on those numbers. Charge based on a direct placement fee –Calculate what you would normally earn on a direct hire and divide it by the length of the contract. For example, if the contract is 12 months and you would earn $20,000 by placing the candidate direct, divide that by 2,080 hours (the approximate number of hours a full-time contractor would work in a year). You would need to make $9.62 per hour to earn the entire fee in twelve months. You can call Top Echelon Contracting for a Quote that will give you the bill rate that corresponds to this amount. There is no one correct way to set the bill rate. The important thing is to be creative with each client and come up with a rate structure that will keep both of you [...read more...]

Sharing Economy Creates New Class of On-Demand Workers

How much do you know about the “sharing economy?” Also known as the “mesh” economy, it is an umbrella encompassing a variety of systems which enable the sharing of human and physical resources and services. It is a complex socio-economic force at work in shaping the future of the larger economy. And, perhaps most importantly, it is growing rapidly. One system that will almost certainly affect you and the way you recruit is the peer-to-peer (P2P) marketplace. Some examples of P2P services include Uber Technologies Inc., CrowdFlower, and TaskRabbit. These services allow the end-user to order up a human service provider such as a driver, data entry person, or errand runner (respectively) through a smartphone app. The technology interface handles the scheduling of these jobs with on-demand freelance workers, often referred to as “micro-entrepreneurs” by those who run the companies. At first glance, these services seem to offer a win-win proposition: the end-user gets quick, painless access to a service he needs performed, while the micro-entrepreneur can work flexibly on the jobs he chooses. However, as The Wall Street Journal points out, “App-enabled workers don’t fit neatly into a regulatory landscape that recognizes only two types of worker: [W-2] employees in traditional work relationships and [1099] independent contractors.” Let’s take a look at the growing pains that on-demand workers and P2P service providers are experiencing as the sharing economy matures.   On-Demand Workers: Micro-Entrepreneurs or Misclassified W-2 Employees? According to The Wall Street Journal, many workers have feelings of ambivalence toward the platforms through which they work. They want to be liberated by the income and flexibility on-demand work allows, but simultaneously feel isolated and confused about their roles with the companies. There are several cons for workers in these arrangements. For one thing, most on-demand work platforms grant the on-demand worker little control over the terms of their labor. Some end up in a grey area with their behavior, work guidelines, and even wardrobe defined by the platform. They are effectively employees, yet none of the traditional W-2 employee protections or benefits apply to them. Moreover, on-demand workers must accept a contract to work with a service platform. The terms of these contracts typically saddle them with all of the risk and liability of independence from a traditional employment situation, but none of the potential rewards of true entrepreneurship. It is clear that a compromise must be found between the platforms and their workers.    P2P Service Providers: Innovators in an Unclearly Defined Landscape As with any innovation, the P2P service providers at the forefront of the sharing economy are operating in unchartered territory. They understandably tend to favor the 1099 independent contractor (IC) model of freelance labor, since it saves cost and keeps them unencumbered by employer tax obligations and legal liabilities. However, their on-demand workers may not be correctly classified as ICs. For example, a recent ruling against FedEx Corporation determined that delivery-truck drivers who were required to wear FedEx uniforms, follow standard grooming rules, and use company-owned vehicles were incorrectly classified as ICs. Many P2P service providers are facing similar suits due to the control they exert over their workers’ schedules, work, behavior, and even wardrobe. The proliferation of P2P services will eventually force the regulatory bodies to adjust, but those adjustments may be a long while off. Meanwhile, their business models have sparked a debate in courts as to whether on-demand workers should be considered W-2 employees. Unfortunately, this discussion often comes as a result of lawsuits leveled by the disgruntled would-be employees. These on-demand workers, since they do not have the autonomy and control over their work that would classify them as true ICs, maintain that they are entitled to the traditional protections and benefits of a W-2 employee. The law seems to agree. On its website, the IRS states definitively: “You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done).” Based on these clear rules, experts predict many of the lawsuits will be successful. It is unlikely that this will put an end to the sharing economy, which has been further legitimized by Amazon’s recent announcement of its own addition to the P2P marketplace, called “Home Services.” However, it seems likely that P2P service providers will either have to bring their on-demand workers on as true W-2 employees, give up control over them and their work, or find another solution.   Contract Staffing: A Potential Solution to Level the Sharing Economy Labor Landscape Through a third-party back-office service like Top Echelon Contracting, Inc., these P2P service providers can outsource the W-2 employment of their on-demand workers. They remain free of employer liability and tax obligations because the back-office becomes the legal W-2 employer of record. The P2P service provider pays a flat hourly rate for each on-demand worker, just as they would with an IC. This solution also benefits the on-demand workers, relieving them of the liabilities and financial risks they run without a traditional employer-employee relationship. At the same time, they will maintain the scheduling flexibility that first attracted them to on-demand work. The “sharing economy” presents a host of challenges, but it is also opening up new opportunities for recruiters. By positioning yourself to help solve the problems these fledgling companies are experiencing, you can benefit in the changing [...read more...]