So you’ve decided to take your company to the next level by expanding your staff. Great! But being an “Employer” under the law is more than just a title, so before you extend your first offer, make sure your startup is set up for success. Part One of this three […]
After you have conceived of an idea and formed your business, you will probably find that you need some additional help to keep your company running. To address this need, you can engage people to assist your company as employees or independent contractors, or hire other entities to provide services to your business. Regardless of the path you choose, there are important legal issues that you’ll want to consider first. There are risks associated with hiring interns.
While the distinction may not seem important, there are significant consequences flowing from whether your company’s worker is classified as an employee or as an independent contractor. For example, mischaracterizing a worker as an independent contractor when he or she meets the IRS definition of an employee can subject the company to employment taxes with respect to that worker.
Additionally, the default position of the law for the employer’s ownership of intellectual property is different depending on whether the worker is an employee or an independent contractor. It is important, then, to ensure your company’s intellectual property is secured from the start.
Many entrepreneurial companies want to have their employees and independent contractors sign confidentiality agreements and non-compete agreements. It is important that these agreements be carefully drafted, as what you believe you know about non-competes may be inaccurate.