Most businesses today start as self-employment. The entrepreneur chooses the type of business to start develops a business plan and secures financing. The business owner may serve as manager, marketer and manufacturer. If the initial efforts to grow the business are successful, hiring employees becomes a necessity regardless of how motivated the entrepreneur may be.

If your company grows to the point where help is needed, it is important to understand which workers are classified as independent contractors and which are employees. In making these determinations for federal tax purposes, the IRS and the courts typically look at three main categories: behavioural control, financial control and the relationship between parties. Factors such as instructions, training, and method of payment, employee benefits, and the workers opportunity for profit and loss are all considered.

For more information, go to the IRS web site at www.irs.gov and download Publication 1779 (Independent Contractor or Employee). In workers compensation, the key factors to consider in determining whether a worker is an independent contractor or an employee include the right of the alleged employer to hire and fire the worker, to direct the manner of the workers performance or, to control the work to be completed.

Accountants and Attorneys
You may want to make appointments with an accountant and an attorney who can inform you about employer requirements on record keeping and labour law. The nature of your business, its industry and location must be considered. View a list of area accountants and attorneys willing to assist entrepreneurs in the region. Human Resource Tools The process of researching employment regulations, writing job descriptions, interviewing candidates, and hiring employees begins the transformation from entrepreneur to employer. Tools for managing employees are important to limiting employee turmoil and turnover. The most basic tools are: an organizational chart, job descriptions, and, an employee handbook.

• The organizational chart is a diagram that shows reporting responsibility and supervision.
• Job descriptions allow both employee and management to understand expectations.
• A handbook helps new employees to understand their new employer, and it helps existing employees by reducing misunderstandings.