The days of only a 9 a.m. to 5 p.m. job could be coming to an end. Almost everyone has some sort of secondary hustle and bustle in addition to a regular job, if not several regular jobs. But as USA Today recently pointed out, even a soda stand on the side can break the law. From permits and licenses to insurance and taxes, a side job can be a lot more complicated than just going out and doing your thing. As income, secondary employment must be reported in your taxes. If you don`t pay taxes on your secondary income, you may be paying taxes and fines that quickly consume the extra money you`ve earned. It is important that you set aside some of your ancillary income to pay taxes. Good entrepreneurs don`t suffer from a lack of work because of all the people who do secondary work.
That`s just the principle. Entrepreneurs have worked for years to grow their business. Years spent finding operational technicians who can be insured and do their job safely, accurately and professionally. Another general agreement, this clause in an employee contract, makes it clear that everything you create or improve on behalf of your employer belongs exclusively to your employer. This means that under no circumstances can you make a side appearance with this exclusive information. Contractors have much more expenses than technicians who wait to come home from work to come back and do work that the customer did not want to pay for when he was on time. A person who performs this type of ancillary work, whether legitimate or not, presents the same risks as a real contractor. Not getting paid, fire, injury, lawsuit, warranty, etc. But I will say this.
If you do ancillary work, do not use my tools, parts, equipment, pickup truck or name and reputation. Running your own business can be a lucrative, exciting and fulfilling occupation. Protecting yourself legally can ensure the success of your parallel journey. Most industries require you to make warnings and be transparent about your secondary business. For example, if you are paid to advertise products, the U.S. Federal Trade Commission requires you to disclose this fact. Those who make money as an Amazon affiliate, for example, must declare that they make money from qualifying purchases. Think of the $30,000 service van you`ll be driving in, which will only last five years and could be worth $5,000 if the company trades it for your next van.
This is shocking considering what it costs to run a pickup truck at a service call or facility. There are even business owners themselves who don`t fully understand these costs. I know I`m not going to change the minds of the masses of part-time jobbers. Many think it`s okay to lower their bosses for one reason or another. I am in favour of healthy competition and real entrepreneurs who control each other with prices. Follow me for a second. A highly experienced contractor who sends his guys out into the field charges his service technicians on average less than 50% of the actual time they spend on the lookout. The rest includes rent, payroll, administrative fees, lawyers, travel time, storage, paperwork, weekly training, race for parts, return visits that are not even charged to the client, and a host of other expenses. Many bars and restaurants follow the 80/20 tipping rule, which prohibits an employer from claiming a tip credit if a waiter spends more than 20% of their time doing side work.
However, the federal courts have questioned the applicability of the 80/20 rule. In addition, you probably want to take out professional liability insurance. Such insurance protects the financial interests of your secondary business in case your business faces claims or lawsuits. While a side business is a great way to earn extra income, it`s important to understand the legality of a side job. It`s funny because this person knows it`s wrong to ask me to do the side work. If he didn`t, do you think he would call my boss and ask if it would be acceptable for me to go out after work and install the part he found online cheaper? Probably not. And if you`re the employer who discovered an employee`s secondary job, you have options. You can protect your business with non-disclosure and non-competition clauses. And if an employee isn`t hurting him, a side gig may not be the worst. If it makes your employees happy, it may mean they will stay longer and do more good work for you. Statistics show that the restaurant industry provides jobs for 15 million people and generates $799 billion annually. Despite the size and scope of the restaurant industry, countless restaurants regularly violate the Fair Labor Standards Act and other federal and state wage and hour laws.
For example, many restaurant servers are asked to perform part-time tasks without tipping – commonly referred to as part-time work – for which they are not paid or only at hourly rates below the minimum hourly wage. There are significant restrictions on the duties that employers may require of servers and on the type of compensation that these employees must receive for performing those tasks, including ancillary work. Entering a world where you work part-time while saving enough to start your own business cuts your throat to some extent. It`s as if craftsmen knowingly buy stolen tools to use on their construction site instead of going to the store or going online and paying legitimate prices for legitimate tools. If you do, you won`t get upset if you start your own business one day and find that lowballers are undercutting your prices now that you have more expenses than they do. Just like so many other people who got into trading, I thrived on all the knowledge I could gain in my field to be as good as possible. I was just grateful to have a job I could reliably go to and work on a solid foundation. All I wanted was to earn the respect of my colleagues and be seen as someone clients were asking for, and managers would send them to the hard work. If you`re ready to switch to an LLC for your side business but don`t know where to start, Swift Filings can help. We made forming an LLC for side shows a breeze. Online filing can take as little as 10 minutes. To make sure your side business remains legal, start here.
It is important to follow the rules and regulations of the industry in which you have a secondary activity. Here are some things to keep in mind to keep your secondary business compliant and protect yourself and your business. Technically, if there is a legal requirement to be a “contractor” in your area and you do not meet those requirements, there is no legal obligation for a client to pay you for your work, even if you have completed it to their satisfaction.