As a business owner for a startup company, you may hold many responsibilities simultaneously and wear many hats as you are assembling your team and building your business model. With duties as an employer, you may benefit from considering these tips for managing employees for a start up company.
- Clearly Define Employee Roles
Hiring independent contractors rather than employees may have its benefits when managing the company budget. Using independent contractors often helps to reduce overhead due to the fact that employers don’t have to comply with any requirements regarding wage or hours. Also, independent contractors do not have to be included on employer’s worker’s compensation nor medical insurance. Cutting these costs may be beneficial to a startup company; however, it is important for employers to know how to correctly classify whether someone is an employee or an independent contractor. As you develop business relations with people, the lines may blur, but failure to correctly classify workers may result in troublesome litigation.
- Independent Contractors
- Classified as someone who performs a service for your company in an occupation that is distinct from your company.
- The worker uses their own tools and resources to perform their services, not any provided by your business.
- The contractor works on their own schedule, not one ordained by your business.
- Employees are obliged to follow strict directions of the company and are under the control of the employer directly.
- Workers use tools and resources provided directly from the company.
- Workers are paid at an hourly (time-based) rate, rather than for a whole project.
- The employer has the ability to fire an employee at any time during the project.
A trade secret is commonly defined as information pertaining to a company’s formula, pattern, program, device, method, technique, process, etc. that derives economic value for the company in ways that is not made known to the public. Company’s make reasonable efforts to protect the secrecy of these methods and techniques that differentiate their businesses, and have the right to disclose this information only on a need-to-know basis. It is important for startup companies to make all the efforts they can to protect their trade secrets as soon as possible and implement the best passwords and make use of confidentiality forms right away to ensure good growth and protection of their competitive edge in the field.
- Decide Which Kinds of Insurance Are Right For Your Business
Depending on the region in which you are conducting business in your startup company, there will be different circumstances for the types of insurance your business should consider. In regions like California, earthquakes are a greater concern, for example. At the beginning phase of a startup company, an employer must also consider if Employment Practice Liability (EPL) insurance is right for you. Depending on the location and the nature of your business and the risks involved in conducting business, you will have to weigh the pros and cons of liability insurance. The more employees you have, the greater the potential for class action lawsuits, so with a greater employee base, the more beneficial liability insurance may be for your company.