Independent contractors play an important role in many companies. Especially in smaller workplaces in an unstable economy, business owners often choose to hire an independent contractor rather than add another employee to the payroll. This decision is beneficial if appropriately implemented. However, employers should be aware of the common, costly mistakes that can occur in these situations.

Why Hire an Independent Contractor

As a business owner, think about how long it took you to put your team together. The hiring process alone takes an ample amount of time to narrow down the candidates, ensuring you have the right one for your position. Then, consider the days, weeks, or even months of onboard training needed to prepare that employee to be useful in their job. However, that employee may not remain with the company for the hoped duration. Perhaps there is conflict in the workplace, they find another job, or some personal family struggle requires them to step away from their position.

Occasionally, companies need their associates to work more hours than usual. For example, during holidays and other peak shopping seasons, retailers experience a boost in sales volume, and the demand for more employees on the sales floor increases. Rather than hire a new “seasonal” employee to work less than 10 hours per week on a temporary basis, many employers offer these additional hours to their current employees. Employees happily accept the longer work days, because it puts more money in their pocket, and the employee is often eligible for the added bonus of overtime pay. However, when paychecks arrive on payday, many employees find that their paycheck was smaller than expected, and this is not necessarily the fault of the employer.

What Are the Overtime Pay Requirements?

In Illinois, if an employee’s workweek exceeds 40 hours, employers must pay a higher rate of pay for any hours worked over this threshold. Time and a half is the required payment for only those additional hours, not the full 40 hours. Some employers choose to offer an even higher rate of pay, and this rate is usually agreed upon at the time of hire or as a general policy. If an employer extends such an offer, such as double pay, the agreement becomes legally binding. There is no state requirement for additional pay for employees working on holidays or Sundays, unless working on those days puts the total number of hours an employee worked that week into the overtime range.

In Illinois, the minimum wage requirement is $8.25 per hour for all employees who are aged 18 years and older, and employees under the age of 18 can be paid $0.50 less than regular minimum wage. In most workplace situations, Illinois employees adhere to the minimum wage laws. However, there have been employers who have violated the minimum wage laws, and may have faced serious consequences. To effectively handle a business and its employees, there are many requirements that the employer must meet to avoid liabilities and lost money.

Wage Requirements

Depending on the employer, new employees and employees under 18 years old may be paid up to 50 cents less per hour. New employees have served their first 90 days of employment. Employees who work for tips may be paid 60 percent of the hourly minimum wage, which is $8.25 per hour in the State of Illinois. Overtime must also be paid at time and one half of the regular rate, after 40 hours of work during the week.

Everyone wants to know that they are valued in the workplace. Unfortunately, there are several situations when an employee is asked to leave permanently, whether that is for poor performance, missing too many days at work, restructuring in the company, or for other reasons. When making the decision to fire someone, there are many  questions that the employer may want to consider. For example, the employer may need a burden of proof, showing that their actions did not violate the Fair Labor Standards Act.

What Type of Employment State is Illinois?

Illinois is considered an “employment at-will state.” This means that, at any time, an employer or employee may terminate employment with no known reason or cause. Even though the employer may freely terminate employment at any time, the reason cannot legally regarding race, religion, sex, nationality, or unfavorable military discharge.

It is always an exciting feeling to see your dream business come to life. After months or even years of planning and preparation, you may be ready to launch your new enterprise. But hold on! Your preparatory work is not yet finished. Many requirements must be met before your business can begin operating. Potential business owners must have an idea of how much cash flow they will receive, and they must provide insurance to employees who have been injured or terminated, among other requirements.

Creating a Business Plan

Before you can move forward with your potential business, you will need to create a business plan to outline your ideas on how you and your business will be successful. To write an effective business plan, you will need to outline the following: