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Are you properly documenting your sales and other help?  
May 27, 2017
Are you properly documenting your sales and other help?
    You don't need to have any written agreement with your help, W2 employees or 1099 independent contractors, until you do; then it's too late.  So, of course you need to have proper documentation in place.  What is that proper documentation?
    All employees should have a written contract.  The contract will deal with the terms of employment, covering all the essential elements of employment, such as 

  • salary or wages
  • benefits, such as vacation and sick time, retirement plans and other benefits
  • length of term of employment or employment at will
  • employee duties and expectations by employer
  • confidentiality
  • anti-competition
  • restrictive covenants
  • dispute resolution

    The need for a written contract varies with the employee and scope of duties.  Every employee is a possible dispute or lawsuit in the making, though the likelihood of things turning sour can range from "never going to happen" to your having to walk on pins and needles so as not to offend the sensibilities of your employee. It's easy enough to get an Employment Agreement signed when hiring or even after you've had long time employees if you explain it's an across the board policy for everyone.  Too many of you out there don't have an Employment Agreement, and you should.  Invest in it today by getting the Standard Employment Agreement, designed for the alarm / security / fire industry.
    What about the 1099 independent sales person?  This is a sales person you pay on commission, with or without a draw against commission.  You need the Independent Sales Affiliate Agreement for the same reasons you need the Employment Agreement with the W2 employee.  If not a sales person but a technician, installing, inspecting or repairing, then we have a Subcontractor and you need the Subcontract Agreement, again for much of the same reasons expressed above.
    Too many of you don't have these necessary agreements:

    While most of you have protected yourself as between you and the subscriber, too many haven't documented the employee or independent contractor relationship.  By the way, regarding the independent contractor, be sure that person or company is truly independent, and if not, employ them as W2 employee and stop the charade before IRS or your state tax agency or your insurance carrier red flags you, conducts an audit and costs you plenty.  
    Don't confuse the Employment Agreement with a company Handbook.  The handbook will deal with more issues and in more detail, and not something you will be modifying for each employee.
    Sometimes the significance of a written Employment ContractIndependent Sales Affiliate AgreementSubcontract and Handbook can make all the difference in whether you get into a dispute in the first place and how that dispute ultimately gets resolved.  Having to establish and prove the facts that form the basis of the relationship with the other party can often be difficult, especially when each side is claiming diametrically opposed positions.  As the "employer" you are expected to have known better, known to document the relationship.  In fact, sometimes the "penalty" for your lack of proper business practice will be definitively held against you.  In New York [perhaps other states as well] if you get into a dispute with your commissioned sales person over the terms of the commission agreement, and you don't have a written agreement, you are going to have a very unpleasant experience.  In court, only the sales person will be allowed to testify what the commission deal was.  What?  That's right, you can't testify.  The commission deal will be what the sales person testifies to.  Think that's harsh?  Well then put it in writing, fool.  Maybe next time, if there is a next time, and your former commissioned sales person doesn't own your company now.  Get the contracts and forms,  It's cheaper than losing the lawsuit and maybe your company.  or call our Contract Administrator Eileen Wagda at 516 747 6700 x 312 for assistance.


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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
516 747 6700
oovoo account: KenKirschenbaum