California has taken Uber and the like to task on insisting that its contractors become full-time employees. The court ruling states that Uber needs to provide benefits and unemployment insurance to its contractors. The state of California had recently passed a bill making it harder for California small businesses to hire contractors. Many small businesses rely on contractors to do the work they couldn’t fill a full-time position for. The recent CA vs. Uber decision could make waves for small businesses outside of California going forward. What does this ruling mean for small businesses looking to hire contractors going forward?
There are considerations when you decide to hire a remote worker for your small business. Just because a remote worker wants to be classified as a contractor, doesn’t mean it’s legal. States and even the Federal government have laws that decide who is and who isn’t a full-time employee.
A small business that makes everyone a contractor to avoid dealing with full-time employees isn’t doing the right thing. The Affordable Care Act damaged this practice when it forced small businesses to provide health insurance to its employees. The Federal government warned businesses against contractor-only employment to avoid paying for health insurance.
Now, small businesses should beware that this fight for full-time status with the government may continue with this new ruling. CA Vs. Uber marks an interesting decision. The pandemic certainly got some small business owners to open up to the possibilities with remote workers. But California’s recent ruling against Uber and Lyft means the door to remote work for small business employees could be slammed shut again.
It is always the case that full-time workers who work remotely but are only working for your small business in a full-time capacity should have the same pay and benefits that your in-person employees have. If we can learn anything with CA vs. Uber its that the government will be looking harder at the practice of hiring remote workers to be sure that whoever is classified as a contractor really is. Your small business should embrace the skillsets of workers outside your office, you just have to make sure you are compensating them fairly and paying the government the due tax on their labor.
For small business owners who are paying for benefits through small group health plans, this news can come as quite a blow to the bank account. Small group health plans are often expensive. Their coverage also usually leaves much to be desired. What is a small business to do?
PEOs are a great way to procure excellent benefits for your small business without paying a fortune for them. PEOs make the cost of benefits, payroll, and HR reasonable and affordable for the small business owner. This takes the pressure off of any small business that may be impacted by AB 5 or any small business owner concerned about the CA Vs. Uber ruling. If you need to reclassify some of your contractors as full-time employees, a PEO is really the only way to go.
For small businesses that have been hiring remote workers in other states as contractors, a PEO is the solution they are looking for. Inter-state hiring is tricky without the right HR solutions to help. Not only are they able to seamlessly and inexpensively offer multi-state health plans, but they will also help keep your small business compliant with whatever employment laws you may encounter from other states.
Any small business owner who has attempted to research PEOs for their small business knows that there are hundreds of PEOs to choose from. Some are small, local PEOs and others are multi-national. Which one is the right one for you? Small business owners really need to consider the goals of the small business before picking a PEO to work with. The needs you have now, along with what your goals for the future will be impacted by the PEO you pick. How do you wade through all the information?
PEO Spectrum works with small businesses that are looking to grow by matching them with the right PEOs that work for them and their business goals. If you are considering a PEO for your small business, PEO Spectrum would like to talk to you. Just 20 minutes of your time will get you on the right road to finding the right PEO. Do you want to see how well a PEO would work for your small business goals? Contact us today for a free consultation.
If you’d like to find out more about how PEOs can help you provide great benefits and payroll management at less than you are paying now, contact us today for a free consultation.
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