I recently had a client reach out with what seemed like a simple question: “Can I pay this person as a contractor?”
Rather than giving a quick yes or no, I took the time to ask about what the person would actually be doing. Were they taking directions from the company? Would they set their own schedule? Would the business be providing tools or training? These details matter because they determine whether someone is truly a contractor or should legally be classified as an employee.
Why It Matters
Misclassifying someone can lead to penalties, back taxes, and even legal issues. It’s one of those areas where many business owners unintentionally get into trouble — not because they’re trying to cut corners, but simply because they aren’t aware of the fine line between the two roles.
What We Did
After reviewing the situation, it became clear this role could be structured as a contractor position — but the agreement needed to be worded carefully. I guided the client in drafting a contract that included proper independent contractor language and avoided terms that might imply an employer-employee relationship (like benefits, set schedules, or direct supervision).
The Result
The client was incredibly grateful. In just a short conversation, they learned:
- The key differences between a contractor and employee
- Why wording in agreements matters
- How proper classification can prevent future headaches
They walked away not only with a compliant contract but also with the knowledge to make better decisions going forward.
Moments like this are why I love what I do — helping business owners stay compliant, avoid costly mistakes, and feel confident about their decisions.
