My first employee (part timer)

NeptunesMoon

looking for some advice on this please. im self employed with sole trader business and need to get somebody on the road for the odd day when im booked up already and the new job needs to be done that day. this wont be a full time job at all, could only be 5 hours or so a week and it could be at awkward times too could be 8am or 11pm could be 10 hours one day or 2 the next really all over the place.

first problem i see is insurance for the car, its a commercial and i dont want to pay for a whole policy for just a few hours a week. ive a spare car myself so they wouldnt be usisng their own but. would i also need employers liability? would my public liability cover them doing their work or just me?

then theres all the legal stuff with p45 and all that. havebnt a notion about any of that or if i need to worry if i could only be giving them 2 hours work in 2 weeks?

i know a lot of employers work cash in hand, is this legal? is it the best way for me at the mo? customers pay in cash so wouldnt be a prob, but how would i put it through books?

id like the quickest and easiest way to go about this just to get somebody a few hours a week or month

cheers:D:D

TheWaterboy

Im not too well up on the whole legal end of it, but for something like this would it be best to take on a contractor. They do the work, invoice you and you pay them as a normal supplier.

Then you dont have to worry about insurance etc. as they should have all that sorted themselves.

Ddad

Agreed, anytime I used someone on the basis you described I agreed a rate, supplied them with the invoice to invoice me and paid them cash, tax is their problem. I'd double check the insurance though, ask your broker.

Trojan

Read The E-Myth by Michael Gerber - recommend it to all SME owners.

tomcollins97

NeptunesMoon wrote: »

i know a lot of employers work cash in hand, is this legal?

cheers:D:D

How are you even in business if you are asking that question??

DubTony

Trojan wrote: »

Read The E-Myth by Michael Gerber - recommend it to all SME owners.

Trojan, how about a brief synopsis of that book?

TheCostumeShop.ie: Ronan

Dubtony, always looking for the short cuts. Its one of those books that's better in its entirety to understand its message.

I'd second that as a worthwhile read.

Mickk

DubTony wrote: »

Trojan, how about a brief synopsis of that book?

If you are a self employed builder/plumber ect. you have a job, you are not an entrepreneur. Someone lent it to me a while ago and had heard great things about it before but I wasn't really impressed. It is fairly basic stuff on how to transition from working for your small business to working on improving your small business.

OP you have to structure it so that you are outsourcing the work to someone else, get him to set up as a sole trader and offer him the work based on price for the job then he isn't technically working for you, you are paying an outsider to come in and help you out. I think if you pay him by the hour then he is considered employed you. What business are you in? It can get tricky if the other bloke is using your tools or materials.

Sonnenblumen

Mickk wrote: »

If you are a self employed builder/plumber ect. you have a job, you are not an entrepreneur. .

:eek:

oscarBravo

I've heard it described as "owning a job" not "owning a business" - a rather crucial distinction.

cfcj

NeptunesMoon wrote: »

looking for some advice on this please. im self employed with sole trader business and need to get somebody on the road for the odd day when im booked up already and the new job needs to be done that day. this wont be a full time job at all, could only be 5 hours or so a week and it could be at awkward times too could be 8am or 11pm could be 10 hours one day or 2 the next really all over the place.

first problem i see is insurance for the car, its a commercial and i dont want to pay for a whole policy for just a few hours a week. ive a spare car myself so they wouldnt be usisng their own but. would i also need employers liability? would my public liability cover them doing their work or just me?

then theres all the legal stuff with p45 and all that. havebnt a notion about any of that or if i need to worry if i could only be giving them 2 hours work in 2 weeks?

i know a lot of employers work cash in hand, is this legal? is it the best way for me at the mo? customers pay in cash so wouldnt be a prob, but how would i put it through books?

id like the quickest and easiest way to go about this just to get somebody a few hours a week or month

cheers:D:D

If you were to employ the person there is many many things you need to consider, you are responsible for them as an employee (health & safety etc) there is also employment legislation you have to be aware of and no matter what you pay them you still need to deal with tax and possibly paying national insurance contributions. I would also advise you read up on that book if you are unsure about the whole process. There is lots of help out there though like local partnership enterprises that can talk you through it so don't be put off by the prospect of hiring someone. (http://www.startingabusinessinireland.com/dirapc.htm)

Cash in hand is viewed as an easy option but if you get caught then its not worth the risk.

Verbal_Kint

what are the penalties for paying cash in hand?

ilovemybrick

Im not sure if it is applicable to your situation but the idea of being "on the road" is something that lots of employers see in one particular way. If it was possible for most of the work locations to be accessible by public transport paying the travel costs and even hours for time spent travelling would often be cheaper than the insurance and milage costs of a car, not to mention it is greener. It was a realisation my former employers came to and to be frank it suited me fine. Instead of driving and stressing and arriving for sales events less than prepared I was paid for the time spent travelling and performed better. In general though it cost me more time, I was earning during that time and overall it cost less than half the cost of mileage.

The E-Myth is a good book, i'd recommend you give it a read also. It's basic and simple to read but that's why it's an excellent read in my opinion because a lot of it is commen sense. I read it in about 3 hours but I read very quckly.

One drawback I will say about the book is it misleads people into thinking you can do everything at once but that is simply not the case unless you have huge amounts of capital. I knew that but if you google around, you see people didn't realise that.

BnA

I don't know what your business is so I could be completely off here.

The first thing I owuld ask is.... Do you want to continue as a sole trader or do you want to grow the business.

If the answer is that you want to continue as a sole trader then I think you might be better off keeping this as simple as possible. You need to find someone who is fairly flexable with regards time and who would probably work for cash. Your best bet might be, to find someone who is recently retired and looking out for a few hours a week to keep them busy.

On the other hand, if this is a business that you want to grow, then now might be the time to bite the bullet and take on someone fulltime. All you need to do is sit down and do your sums. Calculate, if you take on someone, how many extra hours/days/jobs do I need to get a week/month to pay for them. If it looks like it's do-able, then take someone on, on a 3 or a 6 month trial. With the jobs market the way it is, I think you would find plenty of peole who would be willing to work fairly cheaply on a 3 month trial on the basis that if things work out, you will pay them better from then on.

oscarBravo

Verbal_Kint wrote: »

what are the penalties for paying cash in hand?

It's called tax evasion. The penalties are severe. Don't do it.

drunkmonkey

oscarBravo wrote: »

It's called tax evasion. The penalties are severe. Don't do it.

But the employer who's getting the "road warrior" to invoice him for work isn't doing anything wrong? The onus would be on the contractor to have there own affairs in order not the business owner paying them?

oscarBravo

drunkmonkey wrote: »

But the employer who's getting the "road warrior" to invoice him for work isn't doing anything wrong?

If the "road warrior" is a de facto employee, then Revenue will insist on full PAYE treatment. You don't get to arbitrarily decide that an employee is a contractor.

There's no simple rule of thumb on it, but possibly the closest to one is: if the person you consider a supplier can subcontract the work to someone else, and it makes no odds to you, then it's likely that they're a supplier. If you insist on this one individual working for you, then they are probably an employee.

If, as a business owner, you decide that someone who works for you is a supplier and not an employee, you'd better be prepared to justify that decision in the event of an audit.

The onus would be on the contractor to have there own affairs in order not the business owner paying them?

Not quite. Generally, that would be the case - but see above.

NeptunesMoon

cheers for the input!

im ready anyway now to get someone but one chap i asked said that if he registeres as self employed in order to do contract work for me then he wont be able to claim dole anymore and if ive only a few hours of work for him a week then its not in his interest to work for me if theres a chance hell earn less than if he was on the dole! this is probably going to be a problem with more than him so how can i deal with this? i might only have 10 hours work or so a week to give and can only afford to pay them so much an hour. is it possible for them to be self employed and get benefit if they dont get enough hours and what happens if one week i have 40 hours for them? really dont know what to do here. i know i could find someone whos already self employed and getting enough hours a week themselves and sees my jobs as "extras" but then i wont have the security of knowing theyll be available at the drop of a hat if they have there own work to commit to first and id also prefer to give the work to someone out of work too :cool::cool:

Mr Clonfadda

It may be more beneficial to the person being an employee then they can continue to sign on for the days that there not employed. Therefore keeping 5/6 of dole (1 days paid employment a week).
However you will have to then register as an employer and return p30 every three months, p35 every year and also sign forms for social welfare every fornight indicating the days employee worked.

NeptunesMoon

cheers for the reply! yeah so theres no way they can still claim if they are self employed? i dont really want to reg as an employer because its so little hours and then i'd have to do all the extra work and probably get extra insurance and all that too. is there any other way around this, still keeping it above board i wonder?

oscarBravo

NeptunesMoon wrote: »

i dont really want to reg as an employer because its so little hours and then i'd have to do all the extra work and probably get extra insurance and all that too.

With all due respect, tough. You want to employ someone, but you don't want to take on the duties that come with being an employer? Sorry, it doesn't work that way.

TheCostumeShop.ie: Ronan

@NetpunesMoon

The only other option i would think is going through a temp agency and they will do the PAYE and Employers parts and just invoice you for the person as a contractor. It's not the most cost efficient way of doing it, but it does cut down work load (some not all) and makes your life easier - which it seems like your after.

It's an unfortunate (an disgraceful) flaw of our welfare system that some people really are better on the dole than working for a reasonable wage in certain circumstances.

NeptunesMoon

oscarBravo wrote: »

With all due respect, tough. You want to employ someone, but you don't want to take on the duties that come with being an employer? Sorry, it doesn't work that way.

well witih the little hours id be giving and everyones advise here it seems this would definitely be not the way to go for me

TheCostumeShop.ie (Ronan) wrote: »

@NetpunesMoon

The only other option i would think is going through a temp agency and they will do the PAYE and Employers parts and just invoice you for the person as a contractor. It's not the most cost efficient way of doing it, but it does cut down work load (some not all) and makes your life easier - which it seems like your after.

It's an unfortunate (an disgraceful) flaw of our welfare system that some people really are better on the dole than working for a reasonable wage in certain circumstances.

think an agency would be far too much, the margin isn't that big in the business in the first place its definitely crooked system if theres no option for someone to get out of a slump and try get self employed just starting with a little amount of hours at the start :mad: