If you're a government contractor you have one set of HR requirements, if your small business hires contracted employees you have a different set of HR requirements.  Review the two categories listed below and determine what HR responsibilities your small business have.

 

Contractor to The Government

If you are a contractor for the Federal Government you should be familiar with the role of the Office Of Federal Contract Compliance Program (OFCCP).

The Office of Federal Contract Compliance Programs (OFCCP) administers and enforces these equal employment opportunity laws that affect government contractors.

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There are specific laws that governs how contractors should treat their employees:

Section 503 of the Rehabilitation Act of 1973:
Prohibits discrimination and erequires employers with federal contracts or subcontracts that exceed $10,000 to take affirmative action to hire, retain, and promote qualified individuals with disabilities.


 Vietnam Era Veterans' Readjustment Assistance Act of 1974 (38 U.S.C. 4212) (VEVRAA):
 Any contract in the amount of $100,000 or more entered into by any department or agency of the United States for the procurement of personal property and nonpersonal services (including construction) for the United States, shall contain a provision requiring that the party contracting with the United States take affirmative action to employ and advance in employment qualified covered veterans.

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The President also issues executive orders that impacts how government contractors have to treat their employees.  If you're a government contractor these executive orders will impact your small business.

Executive Order To Increase Overtime Pay - Jun 2015

Executive Order Grants Sick Leave to Federal Contractor Employees - Sep 2015

Executive Order 11246:
Prohibits Contractors from Discriminating in employment decisions basedon race, color, religion, sex, sexual orientation, gender identity or national origin

               

 

 

 

Contracted Employees
Unlike employees, small businesses do not have to withhold or pay any taxes on payments to independent contractors.

The IRS defines an Independent Contractor as:

"The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done."

According to the IRS website facts that provide evidence of the degree of control and independence fall into three categories:

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?