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Comment by feld | Hacker News Reader

Compensate your employees well, have them be independent contractors. That's what my employer does.

> Compensate your employees well, have them be independent contractors.

Absolutely, that’s a valid choice. We chose the employee approach because that’s what I would have wanted as an employee: I didn’t want to hassle with health insurance, taxes, vacation, hardware, etc. I wanted to just show up to work and have my employer take care of the rest, so that’s the company I built. (We definitely went overboard trying to make things easier for the employees.)

Most of our competitors in this same space take the contractor approach, and I’d say that’s better for the company for sure. I understand why folks do it, and I don’t think there’s a wrong answer - both have pros and cons. My comment just wanted to lay out a couple of answers to the post’s question, “Why aren’t more companies remote-first?” Hopefully I achieved that.

Within the USA, I like hiring people via the employee route. I'm paranoid that one or more contractors will do something like not pay their payroll, file for unemployment, or simply claim they should have been an employee all along. I'll consider contract arrangements for people that are clearly contractors with their own business, people outside the USA, and short term engagements where someone specifically asks in writing to be a contractor. Anyone who doesn't otherwise say so is going to be an employee. I consider the certain overhead of having employees to be insurance against the uncertain overhead of are-my-people-employees-or-contractors shenanigans.

That is likely not legal in the US. An independent contractor needs to be "independent" for the most part. If they work 40 hours a week, 50 weeks a year, for the same company they are considered an employee and can't be given a 1099. They should be a W-2 type employee. Now if the company wants to hire another company to be the legal employer of the employee they can do that. But still need to be a W-2 employee.

Not to say that people/companies don't do it, but the companies that do are leaving themselves open to legal issues.

Correct. if someone is not independent, but you pay them on 1099, then that is tax fraud

> If they work 40 hours a week, 50 weeks a year, for the same company they are considered an employee and can't be given a 1099

IANAL but this is not the legal framework for determining whether someone is a 1099 resource. There are plenty of people who work 40 hours a week, 50 weeks a year for the same company and are still legally considered IC's.

See here for clarification: https://www.irs.gov/businesses/small-businesses-self-employe...

Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

> Compensate your employees well, have them be independent contractors. That's what my employer does

That's not a coherent thing to say, I'm sorry. If you have contractors they are not employees, if they are employees then they are not contractors.

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