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Hello and welcome to episode 141
of Design Curious Podcast. 

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I'm your host and mentor, 
Rebecca Ward. 

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Today on the podcast, we are 
talking about hiring people, 

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whether you want to hire someone
as an employee versus an 

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independent contractor. 
There are pros and cons to each 

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and there are definitely some 
rules and regulations around 

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them. 
And I definitely have an opinion

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in one way or another what I 
recommend. 

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So you're going to have to 
listen in and find out what I 

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have to say about it. 
And before we get to that, I 

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want to remind you that we're 
going to do the Launch Your 

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Business boot camp for July and 
August. 

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You can sign up right now. 
It's open and you actually can 

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have some pre work to get you up
and running before our course 

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really starts. 
So check that out. 

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Links in the show notes. 
Now let's talk about hiring. 

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You're now listening to Design 
Curious, a place where you, 

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creative one, are here to learn 
about what it really is like to 

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be an interior designer. 
And I'm your host and mentor, 

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Rebecca Ward. 
If you're worried about how to 

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succeed in a creative career, if
you're ready to learn your next 

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steps to become an interior 
designer, and if you want the 

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satisfaction of doing something 
you love every day, you are in 

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the right place. 
Grab a coffee, a notebook, and 

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let's dig into today's episode. 
So part of the growth of owning 

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a business might be that you 
need to take on someone else to 

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help you with the business. 
You might have more work than 

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you can handle. 
And growth is good. 

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You don't always have to grow, 
but if you'd like to opt in, its

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way to make more income and to 
serve more clients. 

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And so you will likely want to 
get some help. 

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Now, the easiest way to hire 
somebody is to hire them as an 

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independent contractor, if that 
is something that is available 

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to you in your state. 
We'll touch on that later. 

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The legal side of it, but from 
personal experience have also 

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gone through hiring people 
versus independent contractors 

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and then as employees. 
And the thought of having an 

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employee is very scary to a lot 
of people and they just bypass 

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it all together and never even 
consider having an employee or 

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setting their business up so it 
can have employees as opposed to

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just having independent 
contractors. 

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Today we're going to reframe 
that fear and show how hiring 

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employees and not just 
independent contractors can be a

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smart and sustainable move for 
your business. 

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So let's talk about some of the 
fears that come up when someone 

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says, oh, do you have an 
employee or are you thinking 

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about hiring an employee? 
Some of the con fears are it's 

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too expensive because there are 
additional things you have to 

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provide when you are an 
employer. 

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There are certain requirements 
by the labor law in your state, 

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and you know you're paying part 
of their taxes as well, and you 

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might be required to provide 
some healthcare and maybe 

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retirement, but those are all 
added expenses in the overhead. 

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You might have a fear about how 
to manage someone. 

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Maybe you've never managed a 
person before, never been a 

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supervisor or in that type of 
position. 

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And so trying to manage someone 
and delegate is definitely a 

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skill to learn and to develop. 
If you have an employee, you 

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have a contract with them, 
you're committed to having them 

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on your team, whether it is for 
a year or maybe 10 years. 

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And so it might seem like a huge
commitment. 

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Maybe you're afraid of 
commitment. 

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And another fear could be, what 
if it slows me down or creates 

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more work, having someone 
alongside me in the business 

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where I have to stop and explain
everything or they make mistakes

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and I have to correct them or 
pay for them. 

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And there's a myth that the ease
of having an independent 

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contractor is better and that 
it's low risk. 

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But usually low risk gives lower
reward than higher risk. 

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And it's usually you want an 
independent contractor as a 

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short term solution that maybe 
creates long term instability. 

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If you were to keep it on for 
very long as an independent 

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contractor, there's less 
commitment by the contractor to 

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you. 
Even if you have a contract in 

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place, there's less things that 
you can require of them if 

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you're doing everything 
correctly and legally. 

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So let's talk about my journey 
into hiring people. 

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So when I had my business 
growing, I decided I needed some

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help. 
And my first couple of hires who

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weren't hires were people who 
were interns at the local 

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college that I went to, 
Sacrament State. 

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As a part of their program, they
are required to have an 

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internship, preferably with a 
designer who has passed the 

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NCIDQ. 
And so I qualified for that. 

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I made my business available to 
the college. 

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And I was like, yeah, I love 
mentoring people. 

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So I'd love to have an intern on
kind of show them the ropes. 

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And then in turn, they get 
credit for working for me. 

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So I didn't have to pay them by 
state law and I didn't feel like

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I could afford it at the time. 
And so I didn't pay my interns. 

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It was nice to have the help, 
but there was a lot of hand 

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holding that had to be done and 
it took extra time for a lot of 

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things. 
And so I felt like it was a 

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balance of them getting 
experience and me getting a 

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little bit of help. 
So I had several interns for a 

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few years. 
I had also a good colleague 

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friend who was wanting to learn 
under me and so I would have her

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a few hours here and there and I
pay her. 

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She had her own business and so 
she was like an independent 

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contractor. 
Then I needed some more regular 

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part time help. 
Designer let me know that 

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someone who had reached out to 
her was looking for part time 

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work, and this person had 
actually applied to be an intern

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before, but it didn't work out 
because she ended up getting an 

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internship somewhere else before
I could take her on. 

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Anyway, I decided to have her 
come on as an independent 

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contractor part time. 
At that time, here in the state 

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of California, it was still OK 
to hire her as an independent 

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contractor. 
I'll get into that a little bit 

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later, but while she was working
for me. 

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So she worked part time for a 
couple years before she got to a

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place where she needed to come 
on full time. 

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Before we got there though, my 
business had grown quite a bit. 

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My CPA recommended I was the 
sole proprietor and I didn't 

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have an LLC or anything. 
So he recommended I was getting 

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enough income that I should set 
my business up as an S Corp, 

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which is what I did. 
I switched over to an S Corp. 

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And when you're a corporation 
then you are an employee of your

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business. 
Even if you have no others 

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employees. 
You as the business owner are an

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employee of your corporation and
so you have to set up payroll 

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and all those things. 
So I did that. 

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My bookkeeper helped me, who is 
an independent contractor. 

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My first hire actually, I didn't
mention was the bookkeeper. 

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Keep my books sorted and she'd 
do like 10 hours a month or 

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something like that as needed 
anyway. 

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So she helped me set up my 
payroll and all that. 

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She's still doing my payroll to 
this day. 

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It's been great to have her 
along this journey, but once my 

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company was set up in that 
fashion, having one employee to 

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two employees on the business 
end of it was not a big deal to 

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change. 
And so when my part time person 

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needed to go on full time, I 
decided, yeah, I'll hire you as 

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an employee and we'll move 
forward in that way. 

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So I think for me, what really 
helped get me over the fear of 

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hiring an employee was actually 
setting my company up correctly 

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as a corporation where I had to 
have payroll. 

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And there's a whole slew of 
reasons why you should set your 

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company up in this way, 
different corporation styles 

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that you can set it up as. 
But really having this kind of 

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official separation and not 
being a sole proprietor helps 

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you to see your business in a 
more legitimate way. 

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And being an employee of 
yourself is great, especially if

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you're going to go buy a house 
or buy a car and you need to 

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have that credit. 
You have AW 2 that you can show 

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you no longer just 
self-employed, which a lot of 

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creditors don't see as regular 
income. 

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Having AW two really can change 
things for you. 

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And also that means that you 
have to meet payroll every month

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or every two weeks. 
It really encourages you to make

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sure that you're bringing in the
money to pay yourself. 

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Some sole proprietors who don't 
have that company set up this 

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way end up not paying 
themselves. 

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The money goes back into the 
company and they never pull any 

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money out, which is a terrible 
way to live because you're not 

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getting any of the benefits of 
working so hard. 

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So what changed for me once I 
had the business was that I had 

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a committed employee who was 
committed to me, but also I was 

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committed to them. 
I was helping to build this 

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person's life. 
They were relying on me for 

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income, and I was a big part of 
that. 

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And it really gave me a sense of
purpose and fulfillment to have 

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an employee. 
It allowed me to scale up, take 

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on more projects because she was
working more hours. 

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And it gave me more freedom of 
time as well because we were 

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both having regular paychecks, a
certain number of hours for her 

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as an independent contractor 
that she was relying on, which 

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is not always guaranteed. 
But I knew that she was getting 

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regular income and I was getting
regular income. 

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Now, to be honest, going back, I
was still learning how to run a 

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business well at that time, and 
I was still working on my money 

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mindset. 
It was a process. 

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And when I did have my first 
employee, I was scared and I 

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started out paying her more. 
And then I was paying myself. 

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I wasn't sure that the company 
could support both of us. 

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And so I said, this is the 
salary I'm giving you, but I'm 

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going to pay myself less because
I just don't know if I can 

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commit to that. 
And it took me a couple years to

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really figure out like, oh, hey,
we can make this work. 

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I need to be paying myself more 
even for my husband to see my 

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business legitimately, that he 
saw a paycheck coming in every 

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two weeks. 
It was just helpful for him 

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because he's more of a person 
that looks at the facts when I 

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talk about the potential income,
profit of shareholder 

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distributions and things like 
that, He's like what's in the 

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paycheck? 
And so for him, it was helpful. 

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So it helped our marriage. 
It helped all the things to set 

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up the business its way and to 
have employees. 

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OK, so that's my story into it, 
as well as the fumbles and faux 

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pas I did. 
So hopefully you're not going to

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go through that, but I am 
definitely understanding all the

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fears that you have when it 
comes to hiring. 

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Personal opinion is that I think
that women are more likely to 

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hire independent contractors 
than employees because it seems 

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like a higher risk. 
And we like to play it safe 

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often. 
But I think that this is part of

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our responsibility to the next 
generation is to show us having 

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sustainable businesses and being
women. 

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Hiring women and empowering them
by paying them well is just 

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going to elevate the whole 
industry. 

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Are you dreaming of launching 
your own interior design 

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business but feeling totally 
overwhelmed by where to start? 

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I get it. 
There's so much to figure out. 

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Business structure, branding, 
contracts, clients. 

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It's enough to stop you before 
you even begin. 

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That's why I created Launch Your
Business Boot Camp, an 8 week 

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00:12:36,920 --> 00:12:40,200
course designed to take you from
confused to confident. 

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Each week I guide you step by 
step through setting up your 

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business, building your brand, 
creating your client process, 

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and launching with clarity and 
support. 

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I'm holding your hand the entire
way. 

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You don't have to figure this 
out alone. 

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If you're ready to finally turn 
your passion into real, 

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profitable business, join me and
a group of like minded creatives

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00:13:01,960 --> 00:13:05,960
in the next session This summer 
spots are limited, so sign up 

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00:13:05,960 --> 00:13:10,160
now at our ward 
design.com/launch Your Business 

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Boot Camp. 
Your business won't launch 

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itself, so let's do this 
together. 

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So why is hiring employees 
better than an independent 

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contractor? 
Well, you have a lot of loyalty 

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and consistency. 
You can create a culture for 

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your business much easier when 
you have someone else on board 

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helping you and there's more 
than one person working there. 

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They can help you with branding.
Of course you have employee 

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contracts so it's set up so that
you own all of the designs that 

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they come up with and you can 
have a non compete clause in 

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there if needed. 
I've heard some bad stories as 

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well where a designer would take
on clients secretly on the side 

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and basically took her 
employer's clients away from her

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and started her own business. 
It was very unethical. 

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There are laws in place that can
help. 

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You can put it into the contract
where it can protect the 

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employer with their clients. 
Because part of the value of 

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your business, if you want to 
talk long term and succession 

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planning is the clients that are
with the firm. 

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Your systems, practices and The 
Client List all belongs to the 

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firm and it's part of the value 
of the firm as well as the 

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designs that are being created. 
And so you definitely want to 

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talk to an attorney when you're 
setting up your contract for 

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your employees to make sure that
you have it set in place where 

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it protects both of you long 
term savings and return on 

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investment. 
So overall, you're going to be 

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paying the employee probably 
less than what you'd pay them as

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an independent contractor. 
Independent contractors should 

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be charging more because they 
have to pay for all of their 

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employment tax, whereas you're 
paying for part of it as an 

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employer. 
So that usually gives them a 

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lower hourly rate, but a more 
consistent number of hours. 

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Whereas independent contractors 
take all the risk of not having 

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any work. 
The person that they're working 

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with could at any moment say, 
OK, we don't have any work for 

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you this month, and then they 
have no income that month. 

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One of the best advantages 
though, of having an employee is

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that you have control over their
schedule. 

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Because an independent 
contractor, you can ask them to 

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meet a deadline, but they are 
not required to. 

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You can't dictate what hours 
they're working, and you're kind

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of at their mercy. 
So you want to make an employee,

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you can make sure the quality of
their work is up to date and you

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can manage their work load a lot
better. 

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Because an intermittent 
contractor is supposed to also 

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have other clients besides you. 
You don't know how much work 

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they're doing for another 
designer. 

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Maybe you might be overloading 
them, they might be taking on 

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more than they should, and then 
they're falling behind. 

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All of that kind of gets 
mitigated once you hire them as 

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an employee because you know 
everything that they're working 

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and you have control over their 
hours, which should be normal 

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hours, 9:00 to 5:00, so that 
they have balance and that they 

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can also check out the end of 
the day. 

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I think that being an employee 
over an independent contractor 

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is nice because they have 
restricted hours in the day. 

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Independent contractors working 
for themselves might need to 

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make some more money this month.
So they're working 12 hour days 

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or 14 hour days. 
I mean really that's not a 

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healthy balance. 
And so knowing that you're the 

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person who's working for you is 
only working from 9:00 to 5:00 

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that they are able to check out 
when they go home. 

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It is better for them as well. 
And I've touched a little bit on

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the legal side of independent 
contractor versus employee here 

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in California over the past five
years or so. 

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There was a Assembly Bill 5 that
came through that kind of 

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changed the test for an 
independent contractor. 

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My husband happens to be an 
employment and labor attorney 

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00:17:09,359 --> 00:17:14,440
and he's right now practicing as
a subject matter expert for 

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00:17:14,839 --> 00:17:18,599
California Chamber of Commerce, 
and so he is in this subject all

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day long. 
Before the requirements were 

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00:17:21,319 --> 00:17:23,960
just that. 
The test was that they had to 

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have their own business and that
they had to have other sources 

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00:17:27,400 --> 00:17:30,960
of income besides yours in order
to be an independent contractor.

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00:17:30,960 --> 00:17:32,600
So they had to have multiple 
clients. 

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00:17:33,200 --> 00:17:35,120
The law here in California made 
it more stringent. 

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00:17:35,280 --> 00:17:39,560
The focus of that was to protect
the workers, the employees, to 

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make sure that they are not 
being taken advantage of, that 

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00:17:42,640 --> 00:17:44,760
they have good working 
condition, all of that. 

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00:17:45,440 --> 00:17:49,560
The truth is that most designers
who are hiring another designer 

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00:17:49,560 --> 00:17:54,320
to help them design, they cannot
be independent contractors. 

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00:17:54,320 --> 00:17:59,440
They have to be employees if 
they are doing the core business

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00:17:59,440 --> 00:18:03,280
of work or this in the same line
of work that is your business. 

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00:18:03,640 --> 00:18:06,440
I can have an independent 
contractor who is a bookkeeper 

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00:18:06,440 --> 00:18:09,400
because I don't have a 
bookkeeping business. 

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00:18:10,160 --> 00:18:12,840
If you have questions on it, if 
you're in California, you can DM

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00:18:12,840 --> 00:18:16,160
me or let me know if you'd like.
Maybe I could interview my 

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00:18:16,160 --> 00:18:18,880
husband to talk about this 
subject matter if it you're 

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00:18:18,880 --> 00:18:21,320
curious about it. 
Understanding the law. 

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00:18:22,000 --> 00:18:25,880
I really like to be in 
compliance with my state and 

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00:18:25,880 --> 00:18:29,840
federal rules. 
I know that a lot of California 

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00:18:29,840 --> 00:18:32,800
designers are in compliance in 
this way because most of them 

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00:18:32,800 --> 00:18:35,000
that I know are hurrying 
designers as independent 

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00:18:35,000 --> 00:18:37,760
contractors. 
They could be found out of 

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00:18:37,760 --> 00:18:40,520
compliance if the state were to 
come and check on them. 

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00:18:41,200 --> 00:18:44,320
So it's better to play by the 
rules is what I think in this 

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00:18:44,320 --> 00:18:46,720
situation. 
So let me know if that's a 

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00:18:46,720 --> 00:18:49,560
subject that you'd like me to 
delve deeper into. 

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00:18:49,840 --> 00:18:56,360
But for the most part, I am on 
board with having employees over

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00:18:56,360 --> 00:19:00,680
independent contractors. 
And in order to get there, you 

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00:19:00,680 --> 00:19:03,400
just need to work on your 
mindset shift. 

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00:19:03,520 --> 00:19:05,480
You're going from sphere to 
strategy. 

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00:19:05,480 --> 00:19:08,120
Because if you are wanting your 
business to grow or be 

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00:19:08,120 --> 00:19:11,840
sustainable, having employees 
who have your back and are on 

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00:19:11,840 --> 00:19:16,040
your team that you can rely on 
is the best way to do it. 

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00:19:16,840 --> 00:19:18,520
It's an investment in your 
company. 

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00:19:18,520 --> 00:19:21,400
It's not necessarily a risk. 
You learn something even if the 

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00:19:21,400 --> 00:19:24,960
employee doesn't work out 
because you need to definitely 

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00:19:24,960 --> 00:19:28,120
put some parameters around who 
you're hiring and take your time

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00:19:28,120 --> 00:19:31,240
hiring well. 
But once they're in there, 

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00:19:31,240 --> 00:19:34,200
they're investing into your 
company and making it even 

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00:19:34,200 --> 00:19:36,720
better than you would have on 
your own. 

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00:19:37,760 --> 00:19:40,360
You're not just giving someone a
job, you're building a business 

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00:19:40,360 --> 00:19:43,320
that can support others and grow
beyond you. 

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00:19:44,200 --> 00:19:47,760
A lot of designers don't think 
about succession planning, but 

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00:19:48,360 --> 00:19:50,840
we should. 
There are ways that you can sell

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00:19:50,840 --> 00:19:53,760
your design business. 
It doesn't have to die once you 

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00:19:53,760 --> 00:19:57,760
decide to retire. 
So having employees who can 

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00:19:57,760 --> 00:20:01,560
carry the torture business owner
who wants to take on your design

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00:20:01,680 --> 00:20:03,800
company, that's a big part of 
it. 

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00:20:04,640 --> 00:20:08,640
And then I want you guys to be 
thinking like CEO's, not 

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00:20:08,640 --> 00:20:12,240
freelancers. 
Part of having a mature business

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00:20:12,240 --> 00:20:16,120
is. 
Being able to think like ACEO 

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00:20:16,160 --> 00:20:21,800
and make some slightly scary 
decision, maybe slightly risky 

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00:20:21,800 --> 00:20:26,320
decisions, but that's how you 
get over the line where you're 

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00:20:26,320 --> 00:20:28,120
bumping up against. 
So you can't grow up beyond a 

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00:20:28,120 --> 00:20:31,240
certain point because you're not
hiring anyone to help you. 

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00:20:32,200 --> 00:20:35,040
Who knows, you might have so 
much more enjoyment managing 

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00:20:35,040 --> 00:20:37,080
people than you thought you 
would. 

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00:20:38,000 --> 00:20:39,840
So start with a part time 
employee. 

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00:20:39,840 --> 00:20:42,640
You can have employees who are 
part time as well. 

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00:20:42,680 --> 00:20:46,040
If your business is set up for 
you to be an employee, hiring 

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00:20:46,040 --> 00:20:48,080
someone else part time is not a 
problem. 

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00:20:48,080 --> 00:20:50,400
Usually there's less 
restrictions as well. 

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00:20:51,240 --> 00:20:56,040
I know in California like under 
5 employees has different roles 

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00:20:56,040 --> 00:20:59,920
than over 5 as far as the 
benefits that you're providing 

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00:20:59,920 --> 00:21:02,720
to them. 
And then a part time employee is

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00:21:02,720 --> 00:21:05,520
often limited to the benefits 
they receive as well. 

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00:21:05,520 --> 00:21:09,320
So if you just want to baby step
into it, a part time employee is

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00:21:09,320 --> 00:21:12,680
a great way to do that. 
And then talk to your 

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00:21:12,680 --> 00:21:15,960
accountant, your bookkeeper 
about setting up payroll if 

358
00:21:15,960 --> 00:21:18,760
that's scary for you. 
You don't necessarily have to do

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00:21:18,760 --> 00:21:20,480
it yourself. 
You can hire that part out. 

360
00:21:21,240 --> 00:21:23,760
Talk to them about other 
requirements that you might have

361
00:21:23,800 --> 00:21:26,800
that you need to provide in your
state. 

362
00:21:27,360 --> 00:21:31,080
I just know my own state and 
stories that I hear from other 

363
00:21:31,080 --> 00:21:33,400
people. 
And then the roles that you 

364
00:21:33,680 --> 00:21:38,080
might want to hire first to 
start with, often an assistant 

365
00:21:38,080 --> 00:21:42,680
designer or an office admin. 
An assistant designer is nice 

366
00:21:42,680 --> 00:21:45,840
because those are billable hours
that you can have added on 

367
00:21:46,520 --> 00:21:48,560
office admin. 
Some of those tasks are 

368
00:21:48,560 --> 00:21:51,720
billable, but some are just 
getting off your plate so that 

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00:21:51,720 --> 00:21:55,080
you can do ours. 
And so both of those areas are 

370
00:21:55,080 --> 00:21:59,040
great places to have an employee
in. 

371
00:21:59,560 --> 00:22:04,080
And you're not alone in this. 
So reach out to me if this is 

372
00:22:04,080 --> 00:22:07,200
something that is scary to you 
and you need a little more 

373
00:22:07,200 --> 00:22:09,920
encouragement, we can talk about
it in my Design Mentor. 

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00:22:10,720 --> 00:22:16,160
So the key takeaways I want you 
to have are to not let fear get 

375
00:22:16,160 --> 00:22:19,760
in the way of your growth. 
Basically, having an employee is

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00:22:19,760 --> 00:22:22,080
a great thing. 
It can be very rewarding. 

377
00:22:22,720 --> 00:22:25,880
And I certainly have loved 
having employees. 

378
00:22:25,880 --> 00:22:30,400
I love developing my company 
culture, I love investing in 

379
00:22:30,400 --> 00:22:35,800
them, in their growth, and 
having my mission statement and 

380
00:22:35,800 --> 00:22:38,760
our core values that we work on 
together. 

381
00:22:39,600 --> 00:22:44,040
It really helps defy us and it 
helps me enjoy my job and my 

382
00:22:44,040 --> 00:22:46,560
career so much more having 
someone else alongside me. 

383
00:22:47,360 --> 00:22:51,120
Hopefully that takes some of the
fear around the idea of having 

384
00:22:51,120 --> 00:23:00,840
an employee. 
So there you have it, my 

385
00:23:00,840 --> 00:23:05,040
opinions on employees versus 
independent contractors. 

386
00:23:05,040 --> 00:23:07,600
I obviously have an opinion of 
that. 

387
00:23:08,160 --> 00:23:12,720
And as you heard the ad during 
the episode, this is a great 

388
00:23:12,720 --> 00:23:15,480
opportunity to start your 
business. 

389
00:23:16,200 --> 00:23:19,640
We talked about this as well in 
Launch your business boot camp. 

390
00:23:19,640 --> 00:23:23,280
We are going to be able to set 
you up as a corporation and make

391
00:23:23,280 --> 00:23:29,320
sure that you have that pathway 
that is so easy to make your 

392
00:23:29,320 --> 00:23:32,560
first hire because you've gone 
through all the right steps to 

393
00:23:32,560 --> 00:23:34,720
get there. 
You've talked to experts along 

394
00:23:34,720 --> 00:23:37,400
the way and I've been holding 
your hand to get there. 

395
00:23:37,400 --> 00:23:41,240
So lunch or business boot camp 
is going to be great for some of

396
00:23:41,240 --> 00:23:43,760
you this summer. 
Space is limited, so I want you 

397
00:23:43,760 --> 00:23:45,720
to get in. 
You can sign up right now. 

398
00:23:45,880 --> 00:23:48,320
It's open and you actually can 
have some pre work. 

399
00:23:48,320 --> 00:23:53,600
You can start going in my Design
Mentor platform to get you up 

400
00:23:53,600 --> 00:23:57,800
and running before our course 
really starts, so check that 

401
00:23:57,800 --> 00:23:59,400
out. 
Links in the show notes as well 

402
00:23:59,400 --> 00:24:03,320
as a lot of great free downloads
and other things for you. 

403
00:24:03,320 --> 00:24:05,280
So that's all I have for you 
this week. 

404
00:24:05,400 --> 00:24:07,920
Next week I'll have another 
great episode and until then, 

405
00:24:08,160 --> 00:24:11,560
stay creative. 
Thanks for listening. 

406
00:24:11,800 --> 00:24:14,920
If you love this episode, please
leave a rating and a review. 

407
00:24:15,160 --> 00:24:17,920
This helps me reach other 
curious creatives like you. 

408
00:24:18,680 --> 00:24:22,080
If you have a topic request or 
would like to contact me, simply

409
00:24:22,080 --> 00:24:27,040
head over to my website 
arworddesign.com or e-mail me at

410
00:24:27,040 --> 00:24:29,720
podcast@arworddesign.com.