How to Incentivize Independent Contractors

The employee versus independent contractor debate is a hot topic on many pet sitter forums. The decision to use one or the other should only be made based on legal and financial facts, and how much control you want to have over your staff.

I presented a webinar on this topic to Pet Sitters International back in 2010, and the biggest thing that has changed since then is that the IRS has really started to crack down on the classification of independent contractors versus employees. This crackdown coincided with the boom in the pet industry and the gig economy, because having ICs is the cheapest staffing method for any business owner. If  your staff is classified incorrectly, this can send up a red flag and the next thing you know, you’re being audited. 

By using ICs, you can avoid employment tax and, in many states, unemployment insurance payments as well as mandatory worker’s compensation insurance. The flip side is that person contracted to do jobs for you must have their own business, should have their own insurance, and cannot be told how to do a job; they are simply given jobs and compensated for their completion. They cannot be trained, told to wear a company uniform, or scheduled for work. (See what I mean about having control?)

Employees are far more expensive, but the safer way to go. Employees can be trained and guided, told how to do their job and what to wear, and can often be paid a bit less up front since you are covering their insurance, taxes, etc. Both employees and ICs can be fired, but if an IC later tries to claim unemployment because they were confused about the nature of their employment relationship, you could be in serious trouble.

If you’re not sure that your ICs are classified correctly, check the IRS’s 20 Factor Test. Also keep in mind that individual states may have their own employment laws regarding worker classifications.

If you’ve considered the legalities of your situation and have decided to use ICs versus employees, how can you incentivize them to use FetchFind?

Since you can’t require ICs to take training like you can with an employee, that doesn’t mean that you can’t use many of the same incentivizing tactics from our previously blog on how to get the most out of your FetchFind subscription. The key difference is that they are incentives, and not directives or requirements.  Here are some of the easiest ways to incentivize the learning process:

Gift cards: Out of those ICs who choose to take the provided education, whoever scores the highest gets a $100 gas card or a $50 Starbucks card. 

Lunch and learn: If you have meetings, events, or dinners with your ICs, these are great opportunities to throw in some training (and you do not have to pay for their time). Just invite them over for a meal, but have FetchFind locked and loaded on your smart TV, ready for them to learn while they eat and socialize.

Educational benefits: Offer training as an additional benefit of performing jobs for your company. It’s a boost to their educational toolbox and their portable skill set, and they can say they are FetchFind approved through your company.

Just ask: The most cost effective way to get your ICs trained on FetchFind is to just ask! Ask them to have a look at the courses provided, let them know the benefits for their own businesses and with your clients, and remind them about the experience and credentials they can gain.

Charge for access: Finally, the most awesome way to get your ICs to indulge in FetchFind content is to buy a subscription for your company, and charge your ICs a smaller fee for access. This makes the learning process completely voluntarily on their part. ICs can be entered into the system just like any other staff, but you can choose who you add to the platform based on if they’ve paid for access.

Let’s break it down.

Your company pays for a FetchFind Premium subscription that gives you all of our content with weekly updates, plus Feline Fundamentals and the ability to upload your own content so that all your staff (including ICs) has access. Then, you can charge each of the ICs $10 a month. If you have ten ICs doing this, your monthly subscription is nearly covered! Even if you have only five ICs paying, that still gives your entire company access to an incredible training solution for a fraction of the cost.

It’s akin to group buying power. As an independent  pet care business owner, I pay into a small business association with other small business owners to get big buying power for health insurance (that’s a blog topic for another day). So why not have your ICs pay a small amount to buy into the amazing investment of pet care education? It’s a win-win for everyone involved. So that’s the scoop on incentivizing your ICs to take advantage of FetchFind staff training. And now that we’re all busily preparing for tax day, it’s a good time to check your staff classifications with your accountant or lawyer to make sure you are making the right choices regarding ICs versus employees. While employees certainly cost more, that classification can save you the time, money, and hassle of an audit or steep misclassification fees.