There’s a reason many execs feel like they can’t live without their EA.
The kind of work that the best executive assistants do is high-trust, high-ROI, and long-term — which matters to senior leaders. But it also matters to the IRS.
Why? The role of these types of high-level EAs is often defined as W2 employee work. This means that you can quickly run afoul of the law if you hire a freelancer or contractor as your assistant, particularly in states like California.
Furthermore hiring your all-star executive assistant as a W2 employee is often what’s best for them, since W2s have additional protections under the law like minimum wage, overtime, benefits, family and medical leave, etc.
Hiring employees is a pain, but it’s often the right thing to do ethically and legally.
The good news? Subscription staffing takes care of the hiring issues, from recruitment to compliance. You get the peace of mind of knowing that you’re legally covered while also working with the best talent that is getting all the benefits of employment.
As we like to say, it’s a win-win.
Hiring A Contractor As Your Remote Executive Assistant
As you’re probably well aware, the hiring process can be time-consuming and expensive, which is why many people are going the independent contractor route.
Hiring a freelancer seems like a no-fuss approach and a good way to fast-track any backlog of work that needs to be done. Instead of recruitment, interviews, and payroll, you hand over the work to the contractor and pay their monthly invoice. Easy, right?
Hold on, though.
The considerations you face when choosing whether to hire someone as an employee or contractor aren’t just about convenience. It’s not only a question of what’s quicker (if in fact finding a contractor really is quicker).
There’s the tricky little issue of employee classification compliance.
You might think you have an independent contractor, but do you?
Is Your Remote Executive Assistant An Employee Or Contractor?
If we use tax documents to define those working for us, a 1099 is a contractor and a W2 is a full-fledged employee. But the difference isn’t tax forms, of course. It’s in legal definitions.
The IRS has put out guidance on what an independent contractor is, and isn’t. To make things even more complicated, California is proactively enforcing its own definition (although it’s similar to the IRS).
Here are some ways to differentiate contractor from employee:
- Behavioral. Are you controlling, or have the right to control, what your remote executive assistant does, and how they do their job?
- Financial. Do you control the business and financial aspects of your executive assistant’s job? (e.g. how they’re paid, if expenses are reimbursed, if you provide the tools)
- Relationship. Does your remote executive assistant have contracts or agreements with you that outline benefits, define a relationship, or indicate a sense of permanency in working for you? Are they working for you on an ongoing basis?
When it comes to admin roles, there are cases where a contractor or remote staffing firm may be a good fit for what you need.
But if you answered yes to any of the bullets above, your remote executive assistant is probably an employee, not an independent contractor. As you can see, there are blurry lines between the two. It would be pretty easy to ask too much of a remote executive assistant and slip into the realm of employee.
The U.S. Department of Labor has also released compliance information on how to define an independent contractor vs. an employee.
Based on their guidelines, you should ask yourself a few questions to consider if there have been changes in your working relationship or expectations:
- What’s the nature or degree of control I exert over my remote executive assistant?
- How permanent is their working relationship with me?
- How much have they personally invested in equipment or facilities to work for me?
- What level of skill, personal judgment, or foresight is necessary for them to do the work?
- What profit or loss, or risk or opportunity is there for them?
- How integrated into my business are they? How much do I rely on their work to make my business run?
One thing that’s interesting to note is that changes in federal administrations have meant possible changes to these rulings. That makes compliance with the law even trickier. There’s the IRS, the Department of Labor, and ever-changing guidelines to contend with. Get the employee classification wrong, and you could face significant penalties down the road.
If you’re hiring through a remote staffing platform or service, be aware of whether you will be assigned an employee or a contractor. If it’s a contractor, even if you’re utilizing them through a staffing company, you are ultimately still liable.
While both contractors and employees have their pros and cons, when it comes down to making a decision on which to go with, a W2 executive assistant is almost always a better choice.
Why You Should Hire A W2 Remote Executive Assistant
There are two reasons you’ll want to hire your remote executive assistant as a W2.
- Labor law compliance. As we alluded to in the section above, maintaining the contractor boundary with a remote executive assistant is easier said than done. The longer you work with someone, the more the relationship and expectations naturally change. It isn’t uncommon for long-term independent contractors to gradually become employees by definition, whether their job status reflects it or not.
- Retention. You don’t want a revolving door of EAs; you want someone for the long-term that you can trust. Employees, whether they’re yours or employees of a subscription staffing firm, tend to stick around longer because they’re not constantly worried about the next gig.
Updated on December 19th, 2022