Company Could Be Responsible for Consultants It Sends to Clients

Q: We send computer consultants to work on temporary jobs at our clients’ work sites. What rules apply to these per diem workers?

--Brian Beck

Director of sales, ConsultNet

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A: The rules depend on whether you are basically an employment agency, supplying people who will be paid by the company where they do the work, or a “rent-an-employee” agency.

If you are truly a temporary employment agency, you have little responsibility for treating these consultants as employees. They will be the responsibility of the company that hires them to do the work.

But if you are “renting” out workers--for a few weeks or even close to a year--you will need to be cautious.

This type of arrangement is becoming more and more popular because the big firms that use these people specifically do not want the responsibility of taking them into their pension plans, offering them stock options or otherwise treating them as employees. Instead, the large firms treat the workers as independent contractors. As far as they are concerned, it’s like calling Sears and having a repairman come out to their sites.

When the Internal Revenue Service does employment tax audits, it takes a fairly hard look at this kind of arrangement. In many cases, the agency holds that if you send the consultants out on jobs and you tell them where and when to go, you have an employee-employer arrangement with those individuals.

There are several free publications available from the IRS that discuss the factors that the agency uses to determine employee status. You can obtain them by calling (800) 829-3676 and asking for the Employer’s Supplemental Tax Guides 15 and 15A and form IRS 937 on employment taxes.

--Tom Coleman

National tax consultant

Coopers & Lybrand, San Francisco

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Q: I own a firm that consults on wellness and work-family programs. I am introducing a service for small-business owners in which I coach them through the process of writing or updating their mission statements and business plans to include family and personal goals. I plan to speak to chambers of commerce and am also writing a book. Do you have any other suggestions regarding targeting this new market?

--Leslie Godwin

Parent Support Services, Calabasas

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A: The service you offer could be of invaluable help with one of the most daunting problems faced by small-business owners. Your challenge is to get seen and be heard. You are on the right track in planning to speak to chambers of commerce, most of which have small-business councils looking for speakers with specific expertise.

I would take it one step further and make a plan that includes speaking engagements, media relations and published articles, with each element having its own timeline. For instance, with speaking engagements I would expand to include university extension programs and women’s organizations such as the National Assn. of Women Business Owners and California American Woman’s Economic Development Corp., among others. You should become a member of several women’s organizations, such as Women Inc. In some cases, you could offer a complimentary plan to the organization if there is value in a trade for a membership and/or testimonial.

In media relations, target small-business columnists and publications and position yourself as a resource. Regarding the upcoming book, work with a publicist to tap radio talk-show booking opportunities and book reviews. Offer bylined articles to small-business publications as well as specific industry trade publications on comparisons of businesses with and without a business plan or mission statement.

In the course of your work, develop a database reaped from business cards, memberships and subscriber lists that you can buy from business publications (according to ZIP Codes). Then market your articles, positioning yourself as an authority.

--Noemi Pollack

President and CEO, the Pollack PR Marketing Group

Century City

If you have a question about how to start or operate a small business, please mail it to Karen E. Klein in care of the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia CA 91016, or e-mail it to Kklein6349@aol.com. Include your name, address and telephone number. The column is designed to answer questions of general interest. It should not be construed as legal advice.