421: Overcoming the Barriers to Hiring an Employee vs an Independent Contractor with Kim Ottone Tank
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Do you struggle with whether to hire an employee or work with an independent contractor? Many of us face wanting to grow, find space in our life, or take a break from the day-to-day work, but then worry about whether an employee or independent contractor is the right fit. Kim Ottone Tank, owner of both Apronstrings and Staffingstrings, joins the show to help us understand what it really means to hire an employee. Kim breaks down what the differences are between an employee and an independent contractor, how that impacts our businesses, and how to understand the true costs of each.
Main topcs
Employees becoming more popular
Are they an IC or employee?
Understanding Costs and Benefits
Worry about managing?
Building a team
Main takeaway: Some people don’t want to run a business, they want to work for a business. Those are the perfect employee for your business.
About our guest:
Apronstrings was founded in 1990 by Kim Tank, a registered veterinary technician. Kim is a Certified Professional Pet Sitter through Pet Sitters International. In addition, she has become Fear Free Certified, a program developed to reduce fear, stress and anxiety in pets.
She hired her first employee in 1996, after carefully researching hiring practices in the industry. Her staff have always been employees, covered by her bond, liability insurance and worker's compensation policy. All of her staff receive intensive ongoing training and all are either certified in pet first aid, or are currently enrolled in a class.
Founder and CEO, Kim has always known she was destined to work with animals and has devoted her life to working in pet care. After living in Concord for many years, she relocated her family to Pollock Pines, CA, in 2016, to raise goats and (more) chickens. She has 4 cats and a dog as well. Kim splits her time between the Bay Area and El Dorado County to maintain a close connection with her sitters, her clients and their loving pets. When not working, she loves running, kayaking, mentoring other pet sitters and exploring El Dorado Wine Country.
Links:
Episode 153: www.petsitterconfessional.com/episodes/153
Episode 176: www.petsitterconfessional.com/episodes/176
Episode 279: https://www.petsitterconfessional.com/episodes/279
Email Kim: Kim@staffingstrings.com
Website: www.apronstringsonline.com/
Facebook for Aprondtrings: www.facebook.com/ApronstringsPS/
Facebook for Staffingstrings: https://www.facebook.com/PetSitterHiring
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A VERY ROUGH TRANSCRIPT OF THE EPISODE
Provided by otter.ai
SUMMARY KEYWORDS
employees, people, business, work, independent contractor, pet, pay, hire, clients, worker, problem, filing, kim, state, employer, business owners, visits, pet sitting business, aspect, contractor
SPEAKERS
Kim Ottone-Tank, Collin
Collin 00:02
Welcome to pet sitter confessional. Today, we're brought to you by time to pet and the National Association of Professional pet sitters, employees or ICS. It seems to be an eternal question. And unfortunately, there are a lot of misconceptions around those and all the arguments that people place on one over the other. Today, what we want to do is we want to walk through a few of those and some pros and cons of each of them. And to do that we are bringing Kim Otoni tank back on the show for her fourth episode with us. Actually, Kim, I was looking back over this I can't believe I am so I'm super excited to have you on Kim. Kim was Runza, apron strings, petsitting and cat sitting services. And then she also runs steppin strings, where she does some consulting, as well for pet business owners. Kim, I'm so thankful to have you back on the show tackling this topic. I can't think of anyone else better to do it. For those who haven't listened to the other three episodes. Can you please introduce yourself and tell us all that you do?
Kim Ottone-Tank 00:59
Sure. Um, as Colin mentioned, my name is Kim and I have been in the pet sitting business for 33 years now. Officially, I actually did it as a hobby for 10 years before that. So yes, I'm quite old here. I started apron strings in the San Francisco Bay Area in 1990. I hired my first employee in 1996. And I have been continually operating it ever since. Seven years ago, I moved to the Sierra foothills about two hours away. And I do a lot of my operations remotely managing things remotely that is, but I'm still very active in my Bay Area service. I also have a few clients up in the Sierra foothills as well.
01:48
Well, and today we're talking about employees and independent contractors. And one trend I know that you've you've talked about before is just this this gradual change over to two employees versus independent contractors in from your perspective, why do you think that change is happening?
Kim Ottone-Tank 02:05
I think as the pet industry growing to the point where more people are hiring, more and more people are looking at it as how important it is to be educated on having a staff. And I think the more and more people research, they are looking into the rules, and there is concern about classification. Part of the issue is that more and more people are hearing about problems with mis classification of workers. And as we grow as an industry and have larger and larger teams, more of us are doing research. And we're more aware of the issues that arise as our industry gains more and more respect and attention as well. One of the problems with misclassification is it is a problem for the state and the federal government. And when they begin looking at businesses that are not properly classifying our workers, it is more likely that there will be audits taking place. So it's a serious issue from the point of legality, how you classify your workers. Now, I know that was kind of just a long, general thing. But it's it's very important to look at how you treat your workers as to how they're going to be classified.
Collin 03:33
I think that point of the industry is growing up, right. The industry is getting more respect with and more Yeah, I love how you said and more attention, right from regulators. That is a really key aspect of as more and more businesses are filing their taxes are submitting paperwork, there are more and more eyes looking at these and people are going, Ah, is this is this following our rules. But you know, then statistically to if it was, you know, 30 years ago, not many pet sitting businesses filing a handful of paperwork now 1000s of pet sitting businesses filing lots of paperwork, there's just more likely for things to get caught and looked at. And the more that happens, the more it's going to happen as the regulators and the state and federal agencies are looking at these going, Okay, where are the problems? Right? That's, that's a lot that's driving this to?
Kim Ottone-Tank 04:22
Yes, I think in the beginning, when businesses were smaller, and maybe had one independent contractor, you know, they're not really thinking that this is going to catch the eye of anyone in the government, if they file through a 1099. And no one is necessarily looking at the treatment of that particular staff member. But as companies grow and their companies with 50 people working for them, you're you're starting to get to the point where the income is a little higher, obviously, and you can catch the attention not only that the more workers that you have, the more likely that There has to be an issue where something is brought up if a worker doesn't feel they're being treated, right, for example, if you have a worker who was injured, who's an independent contractor, and they think that they should be entitled to workers compensation, but the, quote, employer doesn't carry it, because they use independent contractors, they could cause a problem, they could file a claim with various agencies, because they feel they're entitled to something by virtue of being a regular worker for this company, and then finding out that they are not covered by this type of insurance. So So what I'm saying is, the likelihood of that happening as companies get larger is greater because you have more and more people out there, the more people you send out to homes, the more risk of a dog bite happening is there. And it's just what's the chances of a problem arising far greater than if you say you have one person working for you. So that is often how these claims how the attention is brought to the company, for not being correctly classified. What
Collin 06:13
you're saying, like from a staff complaint, a staff issue, they file for unemployment, and they start seeking these benefits that that they expect, because that's just what you do in this situation, and maybe for no fault of their own or no malice on their part. They just go through this process. And now you're staring at this paperwork. Right?
Kim Ottone-Tank 06:30
Right. And and as we saw during COVID, two, that was a perfect example of when I seeds were looking for unemployment. Now the government did make steps to cover the contractors and business owners, that was a big exception. To my understanding, that's the first time in history that had ever happened. It previous times, though, if someone came to the state, or some kind of government agency with a claim that they feel they were entitled to unemployment or workers comp, that just produces a big red flag, because then the agency will look to the employer to see why if they're covered for these different things, and if not, why not? And then an investigation starts. I mean, a lot of misclassification audits are random, they actually do my understanding of some of them, they just look for certain come go through certain companies within an industry that they are targeting. But I believe a lot of the misclassification claims have come from these one individual issue who presents a claim. So someone looking for unemployment, thinking they're entitled, then they're not. So and I didn't mean to get into the whole misclassification so quickly, but it invariably comes up when we start talking about this, because that is a big, big issue. And an important thing to consider when you're choosing your status of your workers.
08:00
Right? It really is and of not just that that risk or that likelihood that's going on, but a lot of other things that come into play. So when you when we talked about misclassification? What are regulators looking for in a business? And I think you've talked before about there are a couple of different methods that they can determine is this an employee or an independent contractor relationship?
Kim Ottone-Tank 08:22
Yes. Well, and that's a big, it's controversial everywhere in Oh, how do we decide who's an employee versus a contractor? I mean, that's like an angel question that has been asked for years and years, and they're still trying to come up with one easy definition. Or maybe they're not. I mean, there are several, what I'm trying to say is there's several different criteria used for determining whether someone's an employee, or a contractor, and every state will vary on this. So we have federal government with its eyes on the situation. And then we have each State Department of Labor, and often the states are stricter than the federal government itself. So we have various tests that they use, and there's no so there's no simple answer, although I like to try to put it into sentences now. And then because I think with all the studying, I've done, I have a pretty good idea. But there's like the economic realities, tests, which looks at exactly what it says how dependent on the worker is, economically, and how much control they have over the worker, behavior wise, that sort of thing. And then we have the 20 factor test, which looks at different factors. That point towards whether or not someone is a contractor or an employee, but it's the test itself is a preponderance of the factors. And there's no specific weights given to each factor. So just kind of, well, that's not very clear. And then we have the ABC test, which is much more definitive. Um, a lot of states followed the ABC test, about half of the states use the A, B and C prong for the ABC test. But what's interesting is, and even among the states that use the ABC test, some of the use it for unemployment, but not for general classification. So they'll use a different, it seems to not make sense. But in one state, you could be considered an employee, if you are the unemployment agency in the state, but not necessarily for the other problems, other parts of the government in that state. So to say it's, so it's ridiculously complicated. So you can look at it that well, that it's so complicated, how can you even figure this out. But on the other hand, if you look at all of the tests, and you read them over again, and you read through various opinions written on the subject, court cases, which I have looked at, you begin to form a general consensus of what is in all of the tests. And the biggest things are really control the element of control is in all of that. So control is a big word. What does that mean? It kind of means like everything, when you control any aspect of the person's work, they're calling that control. So that is one huge factor in all of the tests. And in general, I look at it this way. A contractor is someone who is self employed. That is the whole reason you're not paying the payroll taxes, and you're not covering them with unemployment insurance, because they are not a worker of yours, they are their own separate business. And because of that, you're not going to be telling another business what to do. So if you feel that the fact that a contractor you don't have to deal with the payroll taxes and workers comp, and all of that makes it easier. The trade off is though, that you are using a separate business over which you have zero control. And I am always surprised when pet sitters who are hiring for the first time, they will I'm really worried about giving up control, how do I deal with the fact that I can't control everything this person does. And they're representing my company? And I say, well, it is a difficult thing to hand over the reins to someone. And that's with an employee, it's hard enough. And then they'll go ahead and hire an IC. And I'm like, What have what what is the logic behind that if you're worried about giving up control or choosing the status over which you have no control at all.
Collin 12:58
And I know another aspect of that, I think it might be in the economic realities of just the the, the likelihood or the cost benefit of financially, how much they can how many phases but like how exposed they are to risk financially from a business, you know, successfully and whether they can benefit from a business doing well or not. And so there's that, but that what was through that entire thing, Kim is what people should take away from that is, it's not whether you decide if they're an independent contractor or an employee, right? There are factors out that you can't just write on a piece of paper and say you are an independent contractor here, welcome to my company. That's not That's not how this works, right? There are metrics,
Kim Ottone-Tank 13:39
yes, in many of the state rules, or whatever you want to call them, it says, just having just calling someone, an independent contractor is not enough for them to actually be one, they must demonstrate the criteria behind an independent contractor. I've had some seen some comments where people say, Well, I'm not taking out their taxes. So they're an independent contractor. And it's really, no, they're an independent contractor. So I'm not taking out the taxes. What I mean is, it's it's not they have to first be the thing. And then you deal with the repercussions of the thing. But you can't set it up that way, just because you don't say want to deal with the taxes. It has to be it has to be shown that they are they fit the criteria of someone that you would not withhold taxes, right. So I think a lot of people tend to get it backwards. It's sort of like let's mold this person into what I want to be so that it's easier, tax wise, rather than starting out with the person that actually is that thing. So and that's really critical. because what I hate to see is people having to change the way they want to operate their business to fit this tax structure where really what I think is you should hire a staff with all of the elements of control or, or training and all of the abilities to do all of those things that we can with employees, and then deal with the repercussions that come with that which really aren't that bad. It's just means a little bit. It's not even necessarily more expensive, you're just allocating the funds to pay people in a different way.
Collin 15:36
Let's dive into that can because I know that is a really big question that people push back on and they go, I can't have employees, because they're too costly. They're too expensive for me. Well, when you hear that, what kind of goes through your mind? Maybe we've already talked about that a little bit, but kind of like how should we start processing that when we look at the cost of bringing somebody on?
Kim Ottone-Tank 15:58
And I always tell people have you actually run the numbers? Do you know what it costs to send someone on a visit, it is not necessarily more expensive at all. In fact, most people I know using employees are probably spending less it is how the money is allocated is the most important thing. And what is key is knowing your numbers. So if you have someone who's using ICS, and converting to employees and says, Well, I don't want to reduce their wages at all, okay, then it's going to be more expensive, because you are going to have to pay things on top of the wages. But what most of us do with employees is we're adjusting the wages, and then paying the expenses on top of that and coming out to about the same or less. For example, I know that a lot of people that I see is pay 60 to 70%, which is quite high. As far as what is recommended for wages in this industry. I end up at about the 55% mark for my staff, and that includes the wages, the payroll taxes, and unemployment, all that good stuff and the mileage on top of that. So it's about knowing your numbers and adjusting them accordingly. I believe that people with ICS have to pay more. Because to attract someone who's actually an IC, you're going to have to make it worth it to them because they have more expenses on their own by virtue of being self employed. And if they don't, then you have to go back to the question. Another really nice thing. So in order to attract someone who actually runs their own business to work for you, I'm going to say, Yeah, I would, I had a friend who used to pay her 75%. And I was like, wow, I have employees. And I'm not spending that much. Because her people in order to agree to work for her wanted that much money. So is it is it really a savings, I think it's more of paperwork savings than an actual monetary savings. And we all know now that payroll companies handle so much of this stuff for us anyway. I mean, I submit numbers and they take care of it. They do all the tax deposits and everything. So I guess I've been doing it this way. So long, it makes complete sense to me. And I understand that's a big adjustment for someone. But it can be done very, fairly easily. I think
Collin 18:28
it's interesting that you brought up that we're actually when you're looking at bringing people onto your company, there's two different kinds of people, right, this idea of, well, the ICS, you know, they have their own company, they have their own operating expenses, they have their they're doing other visits for probably the same price that you are charging for yours. So you do have to pay more for them to make it worth their time and make it more attractive to them. Versus the kind of person who's looking to be an employee and not worry about the overhead, not worry about his expenses, not worry about running a business. They want to be part of a team and be part of something else. There's different things that are attracting them to you. And they're those costs are are differently allocated. I like how you present it that way.
Kim Ottone-Tank 19:11
Yes, I think when a lot of people are hiring for the first time, one of the questions and I often see this asked by people who have never hired before, so I understand they don't have that positive experience behind it that some of us have had is why would someone want you know, I charge $25 A visit Why would anybody want to do this for me and not make the whole amount? Yeah, that is a really common, they don't seem to understand that. Someone would actually want to do this as an employee and there are a lot of great reasons why. For example, you know, I hire people for specific set days of the week. Nobody works for me seven days a week. If they were to go out on their own and decide to start their own business they'd pretty much because we're petsitting not just dog locking were heavily petsitting. And they'd be working seven days a week for months on end if they were to run their own business. So that's the first thing is a lot of people, they don't, and they don't want to have to go out and get their own clients, they don't want to have to deal with the paperwork, they don't want to have to get the insurance, they want a job, they do not want a business. So for them, they can walk right in. And without doing any marketing, or buying any insurance or getting set up as a business. They've got clients, you know, the I, we were talking about my, one of my newer employees, you know, on his first day, he walked in and have like six visits, that would not happen if he was starting his own company. So he's got instant paycheck coming in, that I am providing all of the work and the training, and he's going off to college. So you know, he's not going to want to start a business that he has to shut down in August. So I think if you look at it from the perspective that there are people who want a job, yeah, rather than a career or a lifestyle, all consuming lifestyle, like that's it.
Collin 21:07
I don't know what you're talking about.
Kim Ottone-Tank 21:12
And for a lot of people, they're not a lot of people are looking for part time supplemental jobs. So the actual amount per hour is not as key to them as more does it fit with their schedule of their other job? Does it fit with their school schedule? So finding a job has many intricate things about it more than just what the paycheck is? So yes, someone is willing to do a visit for less than $25. As long as you know, they're making at least minimum wage, and especially if their mileage is covered, it's often worth it to people to have this wonderful job where they aren't flipping hamburgers, because everyone likes to say, you know, the alternative is flipping hamburgers, but it's true. A lot of jobs are like that. And so they're walking into a job with pets. And they've got instant work and instant, essentially an instant paycheck. So there are a lot of people who want to be unemployed, right?
Collin 22:11
Yep. And that's we have to make it attractive to them and to be talking to those people in the right way. And that takes our mindset understanding exactly who we're doing. And that's hard because we're business owners, right? It's, it's somewhat natural for us to expect other people to want to run a business because that's how brain our brains wired. Otherwise, we wouldn't be running a business. So it's kind of hard for us to comprehend, oh, some people just want to show up and work right. Some people just want to be told what to do. And that's, that's a thing, right? But we've we struggle with that, because we didn't go down that path.
Kim Ottone-Tank 22:42
You are absolutely right. A lot of people are in that mindset that I'm running a pet sitting business, and everybody else is gonna want to have this everything set up just like I do know, there. You're right, there are people who want a job. And for those people, they make great employees. So it's completely an ideal situation to have someone as an employee, I mean, we all want to be able to train people and have them do it as we like.
Collin 23:12
Have you heard of time to pat? Dan from NYC pooch has this to say
23:16
on Tibet has been a total game changer for us. It helped us streamline many aspects of our operation from scheduling and communication to billing and customer management. We actually tested other petsitting software's in the past, but these other solutions were clunky and riddled with problems. Everything in time to pet has been so well thought out. It's intuitive feature rich, and it's always improving.
Collin 23:37
If you're looking for new pet sitting software, give time to pet a try. Listeners of our show can save 50% off your first three months by visiting time to pet.com/confessionals. Kim, you had mentioned earlier about part time work. I know many people think well, because I only have part time work or because I only have a few hours here and there. I have to hire an IC.
Kim Ottone-Tank 24:00
Is that true? No. There's there's nowhere I know of that you have to provide a certain amount of hours to an employee. Now there are a couple of states I believe that have some type of minimum shift law. And that could come into play. I believe it might be Rhode Island that where they have to work a minimum of three hours of a three hour shift. Don't quote me on that. But I'm just throwing out there as there is a state where I believe there is a three hour shift. So that could be a factor. But in general, you don't have to promise a certain amount of hours you can have an as needed employee when I first hired I hired someone who it was very spotty in the beginning he might not work at all during the week and then he might work a couple of days the next week. So it's basically an athlete an employee. And that's the perfect way to get your foot in the door. Get your foot in the door with hiring because as you grow then you need Need the person more and more and then you ended up, you end up needing more people. And you can put your schedule together with, I always call it putting a puzzle together with bits and pieces here and there you can have it most of my staff is part time I have someone who works between 30 and 40 hours a week, and I really consider her full time. But most of my staff work anywhere from three hours a week to 20 something or in her case over 30. So we structure it based on the availability of the person and where we can plug them in. If they have availability, during a time that we see in our schedule, we need help, then they're a fit, with Alana assuming all the other factors are in place as far as they're capable, if they're capable being our employee. So, you know, I think an IC could be a solution for someone who says who say maybe goes on vacation once a year, and needs a bit another business owner to come in and fill in for them, that sort of thing. But I see usage. In general, when I look at all of these different tests, they generally are meant for short term commitments, usually for aspects of the business, that is not an integral part of the business. But if we get away from that for a moment, let's say you do so use someone to do actual pet setting, I think the place where it would fit in the best would be again, like once a week for a vacation. But if you're using I mean, once a year, excuse me for a vacation, and that would be an unusual circumstance. Most of the time when people need help, and it's on any kind of a regular basis, it's going to be best to go the employee route. And again, this also depends on what state you're in how carefully they're going to look at. And I hate to come across as always looking at this from a point of Oh, you're gonna get audited? Oh, that's not legal. Oh, point of fear. You know, because that's really not. I'm not trying to scare anyone. But the problem is, it is always going to be out there. If you have employees, it is safe to say that the state is never going to come after you for misclassification because they want you to use employees. And if you if you use ICS, that will always be hanging over your neck because you could have one auditor who thinks you're just fine. And a year later, another auditor says Oh, no, that's not my interpretation of the rules. So with employees, like I said, you're always safe. So I think that's not a small concept. I think that's really important to keep in mind. I have worries about my business, I have worries about making enough money, I have worries about making sure our taxes are all filed. Although my payroll company takes care of that. I everyone has all kinds of worries. But the one thing I don't have to worry about is my classification. Because the states want us to use employees. It's just a fact. And it's something I've learned to all the research I've done it's it's the conclusion I've come up with.
Collin 28:26
Well, as you mentioned, to the employee designation comes with a lot of flexibility with how we determine their usefulness to us in our business. If it is only once a month, if it is only whenever you need it, that's okay. But the risk of the other way of doing it actually is quite great for us and facing those down. That's not an inconsequential thing that we should just put it off to the side, like you said, we have enough on our plate to worry about, we should be looking at where our risks are in our business, where we want to spend our time stressing and and determine that and go okay, well, maybe maybe I'll do it this way and just have somebody and that takes us going, here's what I need for my business. Let me find the person that fits that. Or maybe let's find a person who has the kind of flexibility who's looking for this kind of work and approaching it from a slightly different angle.
Kim Ottone-Tank 29:11
So one thing I've seen mentioned on some of the forums is that there is a concern for using employees because the potential employer felt that it was so restrictive meaning Well, you have to follow the labor laws and you have to pay this and you have to pay for that. And they felt that the I see model was much more fluid and flexible. And yet I see it completely the opposite way. I find that the contractor model is incredibly restrictive, because you have given up all control essentially. Now the one aspect that people debating me on this will say, well, as long as all the instructions come from the client, then I am not exerting control over the worker. But I don't know how your clients are, but sometimes it's darn hard to get the right instructions out of the clients. And I don't know what I would do if I could not specify to my workers when to show up, I tell them, where I want them to go first, about what time I want them to start. And repetitive service, I think that type of control is critical. So having employees gives me the freedom to exert the control, I need to run the business properly, the following the labor laws and all of that, honestly, if you have a good payroll company, and you have perhaps some, if they have an HR element, where you can get some advice on various aspects, it's really quite freeing, because we all want to pay people enough anyway, we all want to provide a good working environment for them. And these laws and guidelines, move us in that direction. I think for anyone who really wants to have a cohesive team and have retention, you want the guidance that the government provides as far as pay, and mileage and all of that sort of thing. I think it's candling, from the employee aspect, promotes retention promotes being a team. And the IC model is more just sort of, you know, come what may because you are not allowed to exhibit the type of same type of control. So I think it's just two different ways to look at it.
Collin 31:52
It isn't and viewing our employees as an investment in our company, and them investing into us because they are an employee it has really, it's a very tight, very close, mutualistic kind of relationship. Right, the employee is making a big commitment to us as being our employee, we are making a big commitment to them and a continual commitment to them as being their employer.
Kim Ottone-Tank 32:19
Absolutely. It goes both ways completely. We're asking for their time, and their work. And in turn, it is up to us to follow all the laws, but also to foster that feeling of teamwork. And I don't know some people feel more strongly about it than others, I really do. Do feel my employees are an investment, they are a key part of how we do our work. And I don't, and I think a lot of it is just sort of the way you think about things too. For example, some people say, Oh, employees cost so much. And I'm like cost, do they cost me money. I don't think they cost me money. They are a truly an investment. Because the money that I put towards them brings me back more. They don't actually they're not an expense. They could be looked at that way, if say you're going on vacation, and you're not working that weak and you're hiring someone, okay, you have to pay somebody to do that work, and you don't have as much money as you would have, if you had done the work, hey, we can all agree on that, that we do have to pay them. And it is sort of an expense, but not from the point of view that once you get to the point where you are sending them to jobs that you could not have taken on without them. Now, we typically run you know, more visits than any one person could do. And if I had to, you know, suddenly do it all? Yeah, that would, that would be pretty difficult. I constantly have more work than I can do myself. So every time someone is going out and doing say, sometimes I have someone doing 10 visits a day that I wouldn't have had time to do. Yeah, it costs me money to pay them to do those 10 minutes a day, but they earned me the company more money than it costs. When I say I'm at 55%. That means for every $100 they go out and earn it's costing me $55. That's $45 that I would not have had, because the company could not I could not have done that work myself. And when you look at that on a larger and larger scale, the more employees say you decide to grow carbon quite large. It's a significant amount of money. They are an investment rather than an expense. And part of this is just the way I say it in my head to it, it it when I think of them an investment. It puts a different value on our relationship than if I were to think of Oh, that's a cost.
Collin 34:56
So there's the financial aspect of the investment of obviously we're pouring training into them. We're pouring resources, we're buying them equipment, we're doing this stuff, we're buying them to our swag or whatever, we have them wearing our shirts or company logos or whatever. But there's also an investment that comes from our our time. mentoring them, right managing them. And that's a big aspect that I see people go well, I'm not I'm not ready to manage, I'm not ready to, to deal with, with with people and concern, so I'm just gonna go the icy route that way, I won't have to worry about it.
Kim Ottone-Tank 35:29
Yeah, and I do see that too. I, I see people say, Well, I've managed people in my previous life, I don't want to do it again, or I've never managed people, I'm afraid I wouldn't know what to do. Well, and I think you're looking at it from the IC versus employee route. Yeah, you don't have as much management with the IC. But is that a positive thing because you have to step away and let them do the work as they please. I think it is just a hurdle that just has to be overcome. Because I did not start out with a business background at all. I was just telling someone yesterday, if you'd told me that I'd be somebody's boss back years ago, I would have thought that was hilarious. And there's just no way that was ever going to happen. But there came a time in my life where I need to have, I needed to have help. And I had to get over that hurdle. And in the beginning, especially with one person part time, there isn't a lot of management, it's, you know, when you've got a lot of balls in the air, and you got a lot of people out there and things are happening. Yeah, there's a fair amount of management going on there. But then beginning, you know, you can hire one person part time, and they can be your well, he is termed guinea pig, but you can learn a lot from working with this person, you can, you know, understand that they're the first employee, and that you want to do everything right. And that you're going to need some feedback, as well as the training you provide for them, you're gonna want some feedback from them, and you will learn you will want to develop your management skills, it is just a natural part of it. And I guess you have to look at it, the benefits outweigh the downsides, but you'll you'll, as a pet sitting business owner, you will want to manage things and that is the key is to having employees so you can't because we if you get to the point where you're you've got all those balls in the air with ICS then you're like, Oh, I can't do anything about this problem that has come up you know you have which I know you are going to talk about that too, about what happens when you
Collin 37:32
it is a natural progression. Absolutely. Kim of going okay, I want this I'm doing this and many of us are, we excel with our clients because of how we do things. I think we can't we can't negate the secret sauce that we ourselves bring of how we approach problems, how we approach sweeping the litter, how we approach last visits, first visits, medications, all that's that that's where we come in. And if we want to now go okay, well, I've got people who I can't get to, I want this person I want, I naturally want to give them the same experiences they had with me, you are now in the world of managing that person to do that work. That's what that is, right? That's what you might not like the word management. So you can be a mentor, you know, you can be whatever, however you want to phrase it, you are directing that person to do the work that you otherwise wouldn't be able to do. And that's, that's where we're headed with that.
Kim Ottone-Tank 38:21
And that is key. Well, no matter who you hire, you're going to want to do that. If you're going to hire people at all, it is key that you are going to want to guide them another term you can use and how to do the job properly. So why not give yourself the best possible outcome by truly legally being able to guide them and not trying to hire someone that you're kind of hoping does things that you wish, right? That's the way you like
38:54
our friends at the National Association of Professional pet sitters are the only national nonprofit professional pet sitting association dedicated to raising and abiding by industry standards. Naps provides pet sitters with the tools and resources to own and operate successful pet sitting businesses and one major aspect of that is there in person conference that's happening March 1 through third 2024. In Savannah, Georgia. This is the bloom and grow your business. Their goal is to bring together industry leaders with session topics that are idea focused on a wide range of subjects to foster learning inspiration and provoke conversations that truly matter. Early Bird registration is good through September 30 2023 for $195. After that registration opens up for October 1 through February 19 of next year for $225. Visit the NAPS website at a pet sitters.org. For information regarding naps, membership certification and complete conference details. It's not a matter of being nitpicky or not a matter of being alone. hounding people it's going well, these are the standards that we have for ourselves, right. And as an employee, this is what you're being held to, versus as an independent contractor. I move, please, please try like, you can't hold them to a state? Well,
Kim Ottone-Tank 40:13
yeah, I think what you have to do with that is, is search out people that you believe have the same standards for you. Yeah, before you choose to use them or not. The problem is, you can't do anything afterwards, really, if they're not meeting the standards, other than whatever is in your contract. Right. So there's no sitting down, and disciplining or anything like that,
Collin 40:34
which is absolutely where I think I see so many questions about employees and independent contractors come up when there's a problem, right? Because up until now, we've just been talking about oh, operate in its best practices and stuff, until we see posts or people ask questions of us. And they go, Hey, I've got a staff member who's not doing the visits the way I wanted to do. How do I handle that? And the first question is always and I see you ask this question. Are they an independent contractor? No, they are the employee, I think it's important to understand why that distinction matters at this point in the business.
Kim Ottone-Tank 41:08
Right. And I think we've talked about that before. One of the reasons why I always think it's super important to specify that because they are so different, the two models are so different, that almost every question is going to be handled differently based on what it is, from the interview hiring process, to managing them to letting them go, all of that is completely dependent on which status they are. A contractor is going to be managed by what is in the contract. So that's should entail everything, including what to do if standards are not being met. How long the contract is enforced, for now, I'm not an attorney, of course, and I don't know how most of these are written because I don't use icy contracts. But my understanding is there should be some kind of date and they should be renewed at some point. That may not be the case. But again, that is that is something an attorney should answer. Because it should be really ICS or project based. So technically, you could say there should be a different contract for each project. Again, that's the question for an attorney. But these are the things you have to think about. If you do not want to use the services anymore, and say you're midway through a job, and you're just not happy with how things are going. How is that addressed in the contract, if the project has not been finished? So these are all really important key points, I think it's important to find an expert in that type of law. Because you, you are I think you're more restricted with a contractor than you are with an employee. Now employees, I know there are a lot of concerns about someone filing a wrongful termination lawsuit and that sort of thing. And it certainly could come up in our industry. So we do have to be careful about how we handle letting people go. But again, I think there's just a few major key points, for example, documenting, having meetings with the potential employee, if there are issues, and documenting so that it doesn't come out of the blue as a surprise if you have to let someone go. And then just to make sure that there are no discriminatory aspects of oh, you know, I got bitten by a dog and I filed a worker's comp claim, and I got fired the next day, that that's a potential problem. Okay. So I think the, I think the the point here, though, is with the contractor, it's, it's key, what's in that contract, and it needs to be very detailed and specified to protect yourself.
Collin 44:01
Well, and part of that is, is the corrective manner. Maybe you have someone who's not performing to your standards, as an employee, as an employer relationship, you can step in and go, Okay, you're not meeting these standards. Here's a course of action that we can do together to start meeting that we're going to check in here are some metrics, here's how we're going to adjust and make this plan. And we're going to check in later and we're going to see how you're doing. It's my understanding that that's not possible with an independent
Kim Ottone-Tank 44:27
contractor. That is not possible, is my understanding as well. I mean, other than I don't even know how that would be addressed in a contract. But I do believe that there's really nothing that we can do and step in and make changes. There's no disciplinary or training that's going to be taking place. So that is the problem because, you know, I always use the example I know that it's not business to business, but I always think well if you had a plumber come in your house, you wouldn't be telling them how to how to, you know snake your drain and How to put the new pipes in. That's their their own separate business and you're hiring them with their expertise to do that job. And that is really kind of the way we have to look at it. With contractors. It's, it's very similar. So you have taken that option away from yourself. You know, I have an employee who I have counseled recently on a couple things, we sat down, we went over it, and we looked at ways that she could improve. And that really wouldn't have been an option had she been in contract for at all. So I think, I think some things that are viewed as again, as more restrictive or actually not, I think, I think employees gives us more freedom to develop the team that we want to have.
Collin 45:48
That's where that idea of being an investment comes back in. Right we we get to develop this person, we get to help make them better, we get to integrate them, build that team, it really is a building a process that that truth, it never really stops, but that's okay. Because we're always improving, and we're always bringing in new people, and it's just, but it's, that's something we get to do. That's an opportunity that we don't have
Kim Ottone-Tank 46:12
otherwise. Yes, and I think I think it's exciting I, I love the idea of constantly developing the team, and fostering that, that job, that joy of the type of work we do, I'm, it's amazing when we get together and we share the stories and that sort of thing. And, and it makes you realize that these your employees are invested and do love what they do. And that's a great recipe to have a good team and good quality work. And I think how we treat them and how we respect them. Ah, brings about more of a, I don't know, we'll we'll start over when I work. For other people. I always did my best work for the people, the employers that appreciated me. I mean, I worked hard, but actually there was a one person I worked hard for out of fear, I will say that. But I left after not too long. And the employers that appreciated me, I was just a little bit more like, I mean, I was always a good worker, but I was a little bit more inclined to go the extra mile for the people that that appreciated me back. And so I always wanted to be that type of employer as well. So being an employer definitely has its struggles and challenges. And Sundays are frustrating when things go wrong. But at the end of the day, I look back and if I've done my very best to improve the situation to counsel people as they need it. And again, and I know I've brought this up before too is I've really developed the art of not getting upset and yelling. Um, what I mean is I go from I skipped the step where I get all upset and mad and I go right to how could we solve the problem. And that is always and I've maintained that and I worked on that. Because I feel there's no place for way wasted time. We solved the problem. And if it's something that needs to be addressed later, when we're calm, we can sit down and go, Hey, how can we make this better next time and not have that happen? What can we do about it? But it's, you know, being employers kind of an art. And it's something that's a challenge, and I love that part of what I do. I think it's when we have people who love their work that I've created a position I've created a job that they love. That is that's an amazing feeling. I'm sure you feel that way too.
Collin 48:54
Yeah, when you're when you're training somebody, and because you get to train them, right, and you're there you're having on that first couple of visits, and the person just can't stop smiling. And that you realize that they've like they found it like this is this is it like they've just they didn't think this was possible. And you you as the business owner have created this for them. Yes, it benefits you. It does. But you've created this. And now somebody's filling it like it really it genuinely is an amazing feeling.
Kim Ottone-Tank 49:23
Yes, I think I think providing jobs for the community is one of the little known benefits of being an employer that people don't think about. They think about their needs that need to be filled in the beginning. But when you think about all the benefits that are going to come back to you, it is a great feeling to create jobs. Yeah, I've as I mentioned, I recently hired my nephew. And so I've gotten some feedback about the job from my sister because because she tells me things. Oh, yeah, he came home he was so excited. And when he found out that he was going to be working the next day he was really excited because he gets to see the is one certain cat that he fell in love with. So that is just gave me goosebumps I thought was great.
Collin 50:10
And what I liked about our entire conversation here cam is that there are few just pillars of going up going, Okay, what do I, as a business owner, want? What do I want to do? Then going and going legally? What am I allowed to do? What are the strictures? What are people looking for? And then what flows through on the other side? Like there really is this, this look at how, what I want, how I want to serve my clients, what their expectations are, what legally is going to dictate how I operate, how I accomplish that. And then there's an end product on the end. And sometimes that means that we may have to change how we offer services, right? It does mean we may have to make some changes to our businesses because of how things are set up.
Kim Ottone-Tank 50:59
Yes, I mean, there are, you know, one thing in California, we have to deal with that not I'm not sure on my list of research to do to find out if any other states have this. But as our split shipped premium, where someone works a morning shift and an evening shift later, we do have to pay them, it's generally the generally it's an extra hour at minimum wage, because we've asked them to go do two different shifts in the same day. So that kind of influences me how I do things, somewhat, sometimes I just have to have the continuity for whatever reason, or due to staffing, I've just got to pay it and that's fine. That's a cost to doing business. And sometimes, I try to minimize it just to you know, if I see a lot of split shifts, obviously, I have to look at my numbers and keep payroll within a certain amount. So that legality influences that's definitely an example of how it influences how I do the business. That's probably one of the reasons we don't do overnights as well, although I don't know that I would do them anyway. But, you know, we go into overtime after eight hours in a day in California instead of 40 hours in a week. Yeah, we're the fun state. But I would like to tell people, If I can have employees here, you can have them anywhere. Yes, we've got that extra stuff.
Collin 52:22
Yeah, but again, it's going what what how do I make my business operate, given the strictures giving these things that I want? And sometimes that means that Yes, as a business owner, or as a business, I can't operate the way I did before I can't do these things. And, and being okay with that. And that's, that's a hard pill that that we have to swallow sometimes is going man, I would love to do that. I just I just
Kim Ottone-Tank 52:45
can't. Right. Right. And I think that's one thing. Um, you know, I'm not really big into giving long drawn out explanations to clients about why I charge or do things a certain way. But every once in a while someone just needs to understand. I've had when it goes back to multiple sitters in the homes, I've had people say, Well, I really just want one sitter when I explained to them that I can't have someone, if you're gone for a week, and you or twice a day, I can't have someone doing that 14 shifts a week. And I mean, I'm getting into a lot of extra costs, and that I would have to pass along to you, and the overtime on the seventh day and all of that stuff. So I think if the, as business owners, we did more educating with the clients who want the overnights. And it might, it might cause them to go okay, well, maybe an almost overnight works, because the person is just going to be sleeping anyway. Or it can help the client understand, well, look, this is what I'm up against, I want to give you the best sitters I can and I feel hiring employees is going to be the best for you the client as well as for me, it is a good marketing tool to have employees, it is good for the clients. I'm providing workers comp insurance and that sort of thing where it's a little bit more risky. If you're sending in a self employed, I see who is may not necessarily have any type of coverage for that. So I think if we guide the client and help them understand the rules and regulations that we're dealing with, they could see it from our point of view, and it might help some clients again to understand. Like I said, it's not, it's not so I don't want necessarily the overnight model to go away. It's just this problem with having employees do it. I just kind of hope that somehow we can come to a happy medium in some way. I don't know how that's gonna happen.
Collin 54:47
I think it's one of those just that it's it's going to continue to kind of butt heads with how we're able to operate and it is gonna take a lot of client education.
Kim Ottone-Tank 54:54
I mean, there are a lot of things that have evolved over time and one of the things I've been And, you know, that has changed for me, you know the industry. In the beginning always use contractors, they also always paid by the job. And now I'm I'm an advocate now for paying hourly, I changed my system about four years ago. And I really feel that that is the best way to go for a lot of reasons not to get off on a different tangent. But as the industry evolves, evolves, we are looking at more of how, how things are done, how people are paid and staying within those rules and regulations. And I do believe the employee model has a lot of benefits for our clients. So it's, it can be, you know, it's just how things are evolving, and it can be presented in a very positive way.
Collin 55:46
Yep. I think that gives us a lot of hope, as business owners, and it's gonna be very interesting to see how this evolves, and moves forward in the future. Kim, I really want to thank you for tackling this topic today. And, and all the wisdom that you shared, I know we haven't solved it entirely. So it'd be unfortunate if, if people have more questions or have very specific situations, how can people get in touch with you?
Kim Ottone-Tank 56:15
Okay, well, they can certainly send me an email at Kim at steppin strings.com. And on Facebook, I am Kimmo Tony tank, and I receive a lot of private messages that way. So you're welcome to contact me that way as well.
Collin 56:32
Awesome. I'll have those links in the show notes. Kim, as always absolute absolute pleasure. Thank you so much for your for your time today.
56:39
Thank you
56:39
My pleasure on the topic of independent contractors versus employees generally comes down to questions of how much it cost or the headaches that have come around with it. But we really need to take a step back and ask ourselves a much more fundamental question as far as what's right for my business, not what's right, for the person that I'm wanting to work for me. And then what's right for my clientele, when we understand the kind of services that we offer, and how we want to offer them and the best possible practices, not just for me, and not just for the person I want to hire and not just for my client, but everybody at the same time, we really do understand the differentiation that occurs between employees versus independent contractors and our business. So what's right for you? How would you want to treat somebody working for you? And how would you want to provide service to your clients? That's a question we all have to answer for ourselves. We'd love to know your decisions on this if you have hired if you're looking to hire what swaying you one direction over another, and you could send that to feedback at Pet Sitter confessional.com. We want to thank today's sponsors, time to pet and the National Association of Professional pet sitters, and we want to thank you so much for listening. We're so appreciative of you. We hope you have a wonderful rest of your week, and we'll be back again soon.
