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Advice You - Are Your Cleaning Company Workers Employees or Subcontractors?
As your cleaning company grows and your client list expands, you'll soon realize that you can't do it all yourself. Hiring, supervising and taking care of payroll are very time-consuming measures. Rather than putting an employee on the payroll, some companie
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
s elect to use independent contractors. But if you improperly classify a worker as an independent contractor when the IRS views them as an employee you could be liable for back taxes, penalties and interest!
Putting employees on the payroll means that you a
Putting employees on the payroll means that you a
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
re responsible for withholding income taxes, social security taxes, Medicare, and unemployment taxes. A business can get around all of this by hiring "independent contractors" instead of putting employees on the payroll. The independent contractor is then re
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
ponsible to pay his or her own taxes and insurance. But the IRS has strict guidelines that determine if they are truly an independent contractor or if they are actually an employee.
Who is an independent contractor? If you, as the employer, only have the ri
Who is an independent contractor? If you, as the employer, only have the ri
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
ght to decide the result of the work being done, and not how that result is achieved, then the individual is most likely an independent contractor. However, if you as the employer control not only the end result, but also how that result is achieved and when
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
the work is to be performed, then the individual is your employee and not an independent contractor.
Following are factors you should consider when determining if you should classify an individual as an employee or an independent contractor.
1. Does the wo
Following are factors you should consider when determining if you should classify an individual as an employee or an independent contractor.
1. Does the wo
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
rker need to follow your methods for getting the job done? An independent contractor can generally decide for himself (or herself) how to complete an assigned task.
2. Do you provide training for the worker? If you have to train an individual for a job, the
2. Do you provide training for the worker? If you have to train an individual for a job, the
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
that person will probably be considered an employee.
3. Is the employee's services an integral part of the business? This will probably bump a worker into employee status.
4. Do you require the individual perform all the services personally? Independent c
3. Is the employee's services an integral part of the business? This will probably bump a worker into employee status.
4. Do you require the individual perform all the services personally? Independent c
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
ontractors may have their own employees or their own subcontractors that perform part of the work.
5. Do you set the worker's schedule and hours? An independent contractor will set his or her own hours. A contractor may have to work between a certain time f
5. Do you set the worker's schedule and hours? An independent contractor will set his or her own hours. A contractor may have to work between a certain time f
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
ame because of agreements with vendors, but specific hours are generally not set.
6. Do you provide the supplies and equipment used on the job? An independent contractor is responsible for the providing their own supplies and equipment used on the job.
7.
6. Do you provide the supplies and equipment used on the job? An independent contractor is responsible for the providing their own supplies and equipment used on the job.
7.
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
Do you pay expenses, mileage, etc.? An independent contractor is usually liable for their own expenses, even though they might bill you and seek reimbursement for items needed during their working relationship with you.
8. Does the worker have other clients
8. Does the worker have other clients
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
? If an individual is working with multiple clients, that is a sign that they are an independent contractor.
9. Do you have the right to fire the individual at any time? Or does the individual have the right to quit at any time? Independent contractors are
9. Do you have the right to fire the individual at any time? Or does the individual have the right to quit at any time? Independent contractors are
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
sually bound by a contract and can only be let go if there is a failure to meet the contract's requirements.
10. Does the worker have his or her own office? Having their own office space is a good sign the individual is an independent contractor and not an
10. Does the worker have his or her own office? Having their own office space is a good sign the individual is an independent contractor and not an
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
employee. The office can be a home office, but they should have a phone line dedicated to their business.
If you believe that your worker has satisfied the independent contractor status, strengthen your stance by doing the following:
1. Put your agreement
If you believe that your worker has satisfied the independent contractor status, strengthen your stance by doing the following:
1. Put your agreement
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
ith the contractor in writing. Make sure that you include a description of the project, the time duration, the amount to be paid and a clause that recognizes that the individual is an independent contractor.
2. Get a completed W-9 form from the individual a
2. Get a completed W-9 form from the individual a
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
nd then be prepared to complete a 1099 at the end of the year.
3. Pay only when the independent contractor submits invoices to you.
4. If the particular project changes in any way, goes over budget, takes longer than expected, etc., address these issues in
3. Pay only when the independent contractor submits invoices to you.
4. If the particular project changes in any way, goes over budget, takes longer than expected, etc., address these issues in
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
writing.
5. Have the independent contractor provide you with documented proof of insurance.
6. If at all possible, do not pay the independent contractor on an hourly basis. Instead, break down the amounts to be paid in terms of deliverables you receive thr
5. Have the independent contractor provide you with documented proof of insurance.
6. If at all possible, do not pay the independent contractor on an hourly basis. Instead, break down the amounts to be paid in terms of deliverables you receive thr
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
oughout the life of the project.
Following these guidelines is not a guarantee the IRS will consider the worker as an independent contractor. If you are in doubt about the status of an individual, you can submit Form SS-8 to the IRS and ask for a determinat
Following these guidelines is not a guarantee the IRS will consider the worker as an independent contractor. If you are in doubt about the status of an individual, you can submit Form SS-8 to the IRS and ask for a determinat
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
on of the worker's status.
You can run into an endless nightmare of fines, penalties and taxes if you improperly classify your workers as independent contractors when they are in reality employees of your cleaning company. It may seem easier to just call yo
You can run into an endless nightmare of fines, penalties and taxes if you improperly classify your workers as independent contractors when they are in reality employees of your cleaning company. It may seem easier to just call yo
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
ur workers "independent contractors" than have them on your payroll. But if you can't convince the IRS that these are not your employees, your cleaning company may have a tax burden big enough to drive you out of business!
Copyright 2006 The Janitorial Stor
Copyright 2006 The Janitorial Stor
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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