Legal Question in Business Law in New York
Employment Question
I want to do marketing for my business. I want to hire people to hand out marketing literature and coupons. I do not want to pay them an hourly rate. I want to pay them based on how many sales they bring in. I will be able to track this by giving each ''consultant'' their own coupon code. I will pay them every time someone uses their code when signing up for the site. The insentive is that until the coupon codes expire for six months, they will make money every time a sale is made with their coupon code. I want to avoid legal issues by hiring them as an employee. Am I able to hire them as a consultant and how would I go about doing this?
1 Answer from Attorneys
Re: Employment Question
In general, there should be a way to structure an independent contractor relationship with sales people working for incentive compensation, but this a very fact-specific matter that requires understanding of where they would work, how they would be controlled in their work, how they are compensated, etc. IRS has developed a 20-factor test for this very issue and it is important to draft an agreement in a way that addresses these factors in your favor.
Feel free to call me if you want assistance in preparing such an agreement.
The above reply is in the nature of general information, is not legal advice and should not be relied on as such.
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