Beth Green from Paws Pet Care in Louisville KY shares with us her lawyers interpretation of her pet sitting business with Independent Contractors. Listen in as she shares with Bella about the flow of the money, the suggested guidelines, the question about which is the right way to go.
This episode is great for those pet sitters who have Independent Contractors. Beth is an incredible role model who demonstrates all the proper care and thought that it takes to run the business the correct way. I applaud her self reflection to constantly be checking if her business lines up to her personal needs and desires. I admire the way Beth doesn’t just follow the masses and really investigates the law, the risk, and the control in which she desires in her business.
In June, the Feds came out that they are putting more money in the budget to audits. Beth wanted to get confirmation from her lawyer that she was still doing everything right. What I loved about what she did was that she sent her lawyer EVERYTHING she had. She paid a retainer. Beth’s lawyer took 4 weeks to review Beth’s info and research the industry!
This is such a huge point because she didn’t run in for a “free consultation” and tried to jam everything into 30 or 60 minutes.
Link to the audits. https://jumpconsulting.net/2014/05/12/recap-learned-pet-sitting-audit-case-studies/
Your decision to have IC’s will depend on your comfort level of risk.
How much risk do you want to take? Beth’s lawyer wrote this in her three page recap she got in return of her research.
We talk about operations. How the assignments are accepted flows. Contractors decide when they work.
A very good point here is showing that those who like to TELL people when to work, shouldn’t have ICs.
Beth talks about the GPS feature and if she uses it or not.
We discussed what supplies supplies she could supply.
We talked about how she uses her CMS, Leashtime, to assists in ICs
“Do not buy your contracts online” -Beth
We talk about one thing that businesses shouldn’t have on their ICs contracts
There is just so much great information in this podcast and well worth your listen.
If you listen to this and decide that it is time to switch from ICs to Employees, check out the industries largest resource on employees. Learn about the pricing structure, employee manuals, interviewing, hiring, and becoming a manger.
Employee’s are the easier way to go. -Beth
The very last major point that we talked about was workmans compensation. Her lawyer says workmans compensation would be great to have for her ICs. It was because of our industry and bites happen. So then she went to her insurance broker and he told her NO. He suggested she goes to the State and check with the NCCI to get the document for them to exempt themselves. It can’t be copied, etc. It was a really important point. Here is the answer that I mentioned that my insurance broker wrote about businesses having workmans compensation on independent contractors.
All in all, I think they biggest take away from this interview is that a business owner MUST do their homework. They MUST have a team of professionals around them that they can have open and honest discussions.
I would like to thank Beth for being so open and honest with us as she didn’t have to. I just respect her so much. Also, I think it is worthy to mention that Beth’s heart and care for her community is so big that she has created My Dog Eats First. I HIGHLY suggest taking a look into this organization.
Transcript:
Bella: Do you feel like your business is going around on a merry-go-round? Well, I’ve got news for you. This episode is sponsored by my incredible webinar series called Jump in Scale. It gets you off that merry-go-round and up to the next level in your business. It’s called Jump in Scale and it’s free for you right now. Just go ahead and sign up at jumpconsulting.net forward slash scale. You will learn how to grow your business, increase your staff, and not be held hostage to business. So go ahead, sign up for free. That’s jumpconsulting.net forward slash scale. I’ll see you inside.
Welcome to Bella in Your Business, where Bella will discuss anything and everything about your pet sitting business to help you land on target. So get ready, Bella’s got your chute. Let’s jump. Welcome everybody, this is Bella Vasta from Jump Consulting, and I’m here with a great friend and someone I really admire, Beth Green. I’m sorry, Bethany Buster Green. Beth Green, what do you want to be called? Because you have an identity crisis like I do.
Beth: I know right. Beth is completely fine. My mom calls me Bethany when she’s mad, so still at 40. So Beth is fine.
Bella: Beth is an awesome pet sitter in Kentucky. She owns Paws Pet Care. And I want you all to know that this podcast kind of started because we were on the phone chatting away about Bethany’s business, and Bethany’s been following closely the whole IC employee debate, and she is one of the most informed pet sitters I’ve ever met. She’s constantly questioning, constantly scrutinizing, constantly making sure that the decisions she’s making are still the ones that match up with her needs and wants and risk evaluation when it comes down to it. So without further ado, Bethany had gotten a meeting with her attorney. And Beth, what I love about what you did here is you didn’t just go and sit and talk for an hour and that was it. I mean, I saw the three-page rebuttal that you kind of got from her in writing re-explaining what her conclusions were in her professional opinion. Of course, not ever taking away from my litigation. It’s just clearly her opinion, which that’s what it all sounds in the end. But I love how in-depth it went. And today I want to talk with you about operations supply, how the sitters are assigned work, the control over sitters, the skill set they have, the length of employment, methods of payment, and relationship of you and your staff member, your IC. So for all those who are listening, that’s kind of where we’re gonna go.
We definitely could talk for hours and hours and hours, but we’re gonna actually try to keep this kind of short and sweet. We want you all to know that first of all, I’m not against independent contractors. I just don’t think that it’s a risk that many people are willing to take. Therefore, I feel that employees are really the safest way to go. A lot of people I see using independent contractors are using them as employees and calling them independent contractors. Beth is not one of those people, which is why I think her and I have been able to have this awesome mutual respect for one another. I mean, we’re at polar opposite ends, but we can have an honest discussion about it because we’re both coming from a factual basis.
I love that we’re doing this today because there’s so many people out there that are helping pet sitters and saying that they can have independent contractors and here’s how you do it. But they themselves are breaking the rules blatantly on their website. And I’ve tried to ask them to go toe to toe with me with a mutually respectful discussion like we are. And for the love of God, you’re the only one that’ll talk to me.
Beth: Well, it’s been a journey to the truth, and it’s a never-ending journey because things are constantly changing. To be a responsible business owner, you’ve got to keep investigating and researching and making sure that you’re always doing what you’re supposed to be doing.
Bella: Exactly. So why don’t you tell us how this journey began? What happened when you first started? What prompted you to actually call a lawyer and then how’d that meeting go?
Beth: As you know, Bella, because I’m in your networking group and in your coaching group, there’s a lot going on in small businesses right now across the United States with contractors versus employees and not just small businesses, large businesses too. I believe for several reasons, and I’m not a politician by any stretch of the imagination, but I believe for several reasons that the IRS is really cracking down on making sure that people have their employees or contractors categorized right.
Bella: Compliance, right?
Beth: Yes, that they’re compliant. We could kind of guess as to why, but one thing that my lawyer did say is that maybe because of the free healthcare thing, I mean, the country needs more tax money and they need more income coming in. So what better way to go after that than to start dinging people for taxes and penalties and stuff if they’re not classifying their workers properly.
Bella: I think what it was is that in June they came out and said that they’re putting more money towards small business audits than ever before to make sure specifically that workers are being classified the right thing. And to go off of your point, you said healthcare. The reason why that’s important is because their argument, in my understanding, is that if you have a worker that gets hurt on the job and they’re an independent contractor, then they’re going to end up on the government system and the government’s going to be helping them pay for those or they could be helping pay for those injuries and things. So if they’re properly classified and they’re properly taken care of, it decreases the liability for the government.
Beth: That’s one of the many, many arguments. So we can see where this is happening with corporations like Uber. They recently have been investigated and they have to make some changes. And this is a worldwide business that just took off and grew very quickly. So with our conversations with these things that I’m seeing in the news and the things that I’m reading and studying online and best business practices, I want to make sure that my business is running the way that it’s supposed to be and that my people are classified properly.
Bella: And you know, I needed to know 100% for sure if they were, if they weren’t, what I needed to do in order to rectify that or to make the decision, the informed, educated decision for myself to switch them to employees. So that’s why I met with a local attorney. And I think that is so important that you meet with a local employment attorney. Like I actually went to the attorney that someone would hire if they thought that I had classified them improperly.
You didn’t go on Facebook and ask pet sitters from around the country what they thought—you went to an actual professional. I mean, I think it’s great that we can all discuss these things being from different states and different countries, but the bottom line is you need to go to someone who understands the laws surrounding your business, which there are very few attorneys that are familiar with pet sitting and dog walking businesses.
Beth: Yes. Because we’re really kind of exploding. We’re still in the infancy. We’re still just—the industry is still beginning. And with the rovers and the dog vacays of the world kind of coming into it, it’s clouding what an actual professional pet sitter does.
Bella: So yeah. So you went to the lawyer and what did you say to her? Like “help”? Or did you ask her about certain areas or did she ask you to supply anything?
Beth: So I requested a meeting with her first because I wanted her to be completely clear on what I needed from her. I told her I would pay for the meeting, whatever I needed to do. She did a consultation with me and she did it for free, which was great. And she was very intrigued about our business model because again, questions. She asked a lot of questions because so many attorneys, especially here in Kentucky—there’s not very many big pet sitter and dog walker companies here—but honestly, I think across the United States, it’s just an exploding thing like we talked about.
So she asked me a ton of questions. I actually spent two hours with her in that initial meeting because she had so many questions. She asked me to provide her with my entire packet that I give to contractors when I go through the hiring process, which included my contractor contract, a mutual indemnification non-disclosure type document, and then I have a workman’s comp waiver. I have a document that I call guidelines that kind of, I guess what you could compare that to would be an employee manual. Only I tried to be very careful about how I worded it because when you hire contractors, you can expect them to have to meet industry standards.
Beth: —so that’s where I have to be careful. Because if I have too many rules or expectations that are not industry standards, then that starts to look like an employee relationship, and that’s not what you want with independent contractors. So I gave her all of that paperwork and let her take it home. She took a week to review it and said, “Let’s meet again.” When we met the second time, she had gone through it all and had made a list of concerns. She went point by point explaining which parts could be interpreted as control over contractors or which language was too restrictive.
She told me I was actually doing a pretty good job of keeping the relationship within the independent contractor boundaries but that there were still some things I could loosen up or reword to protect myself better. For example, she pointed out a few phrases that sounded like I was assigning work instead of offering it, which can imply control.
Bella: Wow. So what kinds of questions did she ask you?
Beth: Everything from “How do you find your contractors?” to “How do you communicate jobs to them?” “Do you train them?” “Do you provide materials?” “Do you require them to check in a certain way?” “Do you give them uniforms or logos?” “Do they use your company name or their own?” “Do they invoice you or do you pay them on a set schedule?” It was incredibly detailed.
Bella: That’s a lot of questions.
Beth: It was. And every single one of those questions determines how much control you have over the contractor. The more control you have, the more they look like employees in the eyes of the IRS.
Bella: So what did you find out about how you were operating?
Beth: Well, I found out that some of my practices could look like an employer-employee relationship. For example, I used to tell them they needed to use my online scheduling system for everything. That sounds like control, even if it’s just for consistency. The attorney said I could still use the system but that the language in my agreement should say that it’s optional or for convenience, not a requirement.
Bella: Interesting.
Beth: She also said to avoid giving them supplies like leashes or poop bags. Contractors should provide their own. Same thing with shirts or uniforms. If you require them to wear something, that can look like control. If you offer branded shirts but make it optional, that’s fine.
Bella: So you can’t even require a shirt with your logo?
Beth: Not for a contractor. For an employee, yes. For a contractor, no, because you’re dictating how they represent your business. That’s part of what makes them independent—they should have the freedom to decide how they perform the job as long as it meets general standards.
Bella: That’s a huge difference.
Beth: It is. And it goes beyond just what you say; it’s what you do. Even if your contract says they’re independent, your actions have to show that too. If you’re micromanaging or scheduling their hours, that contradicts the paperwork.
Bella: Right. So what about payment? I know a lot of people pay per visit or per job.
Beth: That’s one of the gray areas. I pay by the job, but I don’t dictate how long they spend at each house or what order they do the visits in. The attorney said that helps support contractor status. She did say that paying them on a strict weekly payroll-like schedule can make them look like employees, though. So instead, I process payments based on when invoices come in.
Bella: That’s such a fine line.
Beth: It really is. And that’s why it’s so important to talk to a professional about it. The attorney even recommended that I check the Kentucky Department of Labor’s website regularly because state definitions sometimes differ from federal ones.
Bella: Oh, that’s a good tip.
Beth: Yeah, and she also told me to keep documentation showing that my contractors have other clients and their own businesses. If the IRS ever asks, that’s one of the strongest indicators that they’re truly independent.
Bella: So if a sitter only works for you, even if you call them an IC, that’s a problem.
Beth: Exactly. They need to show independence. Ideally, they should have business cards, insurance, and maybe even their own social media.
Bella: Okay, that makes sense. Did she tell you anything else that really surprised you?
Beth: She did. One thing she said was that even though I’m following the rules as closely as possible, if a contractor ever decided to file a complaint or claim that they were misclassified, I would still have to go through an investigation. It doesn’t mean I’d automatically lose, but it would still be expensive and stressful.
Bella: So basically, even if you’re doing everything right, it’s still a risk.
Beth: Yes, that’s what she said. And she was very clear that if my business keeps growing, I might eventually need to switch to employees anyway because it becomes harder to maintain that level of separation.
Bella: That’s so interesting.
Beth: It really is. And she also said that there’s no one-size-fits-all answer. What works for one business in one state may not work in another. That’s why getting local legal advice is key.
Bella: I love how thorough you’ve been about this. I think it’s so smart.
Beth: Thanks. I just want to make sure I’m doing things right. I’ve worked too hard to build this business to have it taken away over something preventable.
Bella: Absolutely. And I think that’s such a good example for everyone listening. Whether you have ICs or employees, the point is to stay informed, stay compliant, and protect your business.
Beth: Exactly. It’s not about who’s right or wrong—it’s about making educated decisions and knowing your risk tolerance.
Bella: I couldn’t agree more. Beth, thank you so much for sharing all of this. I think this is going to help a lot of pet sitters out there think more deeply about their setup.
Beth: I hope so. I really do.
Bella: This has been so great. Thank you for joining me on Bella in Your Business.
Beth: Thank you for having me, Bella.
Bella: Thanks for jumping with Bella in Your Business. For more information, free articles, free coaching sessions, and more, go to jumpconsulting.net. And remember, Bella’s got your chute.