A few weeks ago we discussed classifications of contractors versus employees. Now let’s jump right into looking at what benefits W-2 employees have that contractors don’t and how do you structure the “new” hire’s compensation and benefits.
It’s no secret that W-2 employees are eligible for a wide variety of benefits that contractors are not, but what are those specifically? Some include:
- Overtime
- Vacation time or paid time off (“PTO”)
- Meal breaks
- Withheld income and payroll taxes
- Workers’ compensation
- Unemployment benefits
- Family and Medical Leave Act (“FMLA”)
- 401(k) contributions
Wanting to compete in a competitive marketplace for quality employees, you will need to structure your benefits to appeal to those folks. Consider things such as:
- Marketplace base salary
- Eligibility for salary increases
- Eligibility for promotions
- Cross training opportunities
- Annual bonuses
- Commissions
- Profit sharing plans options
- Paid time off
- Holidays
- Health benefits
- Welfare benefits
Once you establish you can/should convert your workers, and that it’d be advantageous to do so, the next question is how do you go about it. We’ll cover that it our next blog, so stay tuned.
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