My first employee-help needed

[Nikki]

Morning MarkL

"Your comment 1) I want him to act as a contractor so I have less hassle iro tax and labour law. He intends to do some part time work on top elsewhere, but I doubt I will end up paying him less then the 80% of his total income which deems him as my employee. So at the beginning my contractor plan might work, but unlikely in the long term.

What kind of agreement do you suggest I make with him? I want is as lose as possible (to be able to get rid of him easily if he is not what I hoped he would be), but minimise the risk that he takes my client base and database and starts a competition to me. So I need some restraint of trade clauses even beyond out mutual time."

Quite simple really, hire him as an "Independent Contractor" or even as a "Service Providor" - that way he is not an employee at all, but rather someone who you consult to or who does specific work for you. The only thing then is then is if what you pay him is more than 80% of his annual salary. This also means that he would be able to work elsewhere and does not work for you full time. This should cover you until such time as you feel comfortable with him or you don't. A service level agreement can be for as long or as short as you want it - remember though to use the correct terminology at all times. He does not work for you he is one of your service providers.

I do work (such as but not limited to - HR department) for several of my clients and my service level agreement with some is limited to the the number of hours that I work or the work that they want me to do or a mixture of both. I prefer to keep it simple and usually lock them into a 3 month contract that automatically becomes monthly after the initial 3 months or alternatively I can sign a new one after 3 months.

Whatever the document you require, I will have - please contact me on my e-mail address of nikki@viljoenconsulting.co.za for a list of all the policies and procedures that I have.

Your comment

"2) What kind of checks and references should I run on him before going into bed with him?"

You certainly need to check the references properly. If you can't get hold of someone who has been given as a reference, then there is usually a reason for that and it is seldom a good one! My own rule of thumb, is to contact the Company and ask to speak to the supervisor of the person who was given as a reference. That way you will get a true reflection of what is going on as often will give their friends (who they worked with) as references. Another tip is to get hold of the HR department - they will be able to tell you a bit more too.

Remember, in this country, it is illegal to give a bad reference and in fact many companies don't give references at all, but rather a certificate of service, so you need to 'temper' your questions carefully and appropriately. One of the questions that I usually ask is "All things considered, if you were able to re-employ Joe Soap, would you?" If they answer "no", I would stay away as something is definitely not as it should be.

Your comment

3) Is it my responsibility to make sure he has the right permits for SA? He is a foreigner like me, but does not have a permanent resident residence like me. Please no suggestions that I must hire a South African by default... H ehas spned here quite some years and wants to become a permanent resident ASAP.

The answer would be a definite yes. If you employ someone who does not have the right paperwork (in this case a work permit is what is required), you leave yourself open to the possibility of a huge fine. The last I heard the fine was around R65 000 - so you have to make the decision - it is a calculated risk that you would need to take.

If, he needs assistance with his paperwork, please contact me on my e-mail address so that I can give you the contract details of someone who can assist him in getting his paperwork correct.

Your comment

4) Any other tips I should think of when employing my first employee?

Yes, if there are specific tasks that you wish him to complete - give him a little 'test'. I have found, many times in the past someone will apply for a position, saying that they know what it is that they are doing, but who clearly don't when they get to perform that specific task - bookkeepers who don't know where to post specific debtors or event planners who couldn't plan their escape out of a paper bag.

So, depending on what it is that you need done, let them 'walk you' through how they would do it - it might not be exactly how you would do it or even want it done, but it would give you an idea about whether they are capable of performing the task.

Also, it might be a good idea to do a credit check on them -I know that all it would tell you is whether they are in debt or not, but it would also give you a bit of an insight into the character of the person and I know that you can do one ITC check per annum for free.

That's about it except - always listen to your 'gut feel' it's usually more accurate than anything else.

I hope that that helps

[MarcL]

Quite simple really, hire him as an "Independent Contractor" or even as a "Service Providor" - that way he is not an employee at all, but rather someone who you consult to or who does specific work for you. The only thing then is then is if what you pay him is more than 80% of his annual salary. This also means that he would be able to work elsewhere and does not work for you full time. This should cover you until such time as you feel comfortable with him or you don't. A service level agreement can be for as long or as short as you want it - remember though to use the correct terminology at all times. He does not work for you he is one of your service providers.
I do work (such as but not limited to - HR department) for several of my clients and my service level agreement with some is limited to the the number of hours that I work or the work that they want me to do or a mixture of both. I prefer to keep it simple and usually lock them into a 3 month contract that automatically becomes monthly after the initial 3 months or alternatively I can sign a new one after 3 months.
Whatever the document you require, I will have - please contact me on my e-mail address of nikki@viljoenconsulting.co.za for a list of all the policies and procedures that I have.

Cheers, just mailed you. The contractor or service provider route will be my choice.

You certainly need to check the references properly. If you can't get hold of someone who has been given as a reference, then there is usually a reason for that and it is seldom a good one! My own rule of thumb, is to contact the Company and ask to speak to the supervisor of the person who was given as a reference. That way you will get a true reflection of what is going on as often will give their friends (who they worked with) as references. Another tip is to get hold of the HR department - they will be able to tell you a bit more too.
Remember, in this country, it is illegal to give a bad reference and in fact many companies don't give references at all, but rather a certificate of service, so you need to 'temper' your questions carefully and appropriately. One of the questions that I usually ask is "All things considered, if you were able to re-employ Joe Soap, would you?" If they answer "no", I would stay away as something is definitely not as it should be.

Good point, but some hard to implement as he worked for rather small companies without an HR department or supervisor. I know the guy he gave me as reference, but my encounter with him was not pleasant. So if he remembers me he might shut down.

The answer would be a definite yes. If you employ someone who does not have the right paperwork (in this case a work permit is what is required), you leave yourself open to the possibility of a huge fine. The last I heard the fine was around R65 000 - so you have to make the decision - it is a calculated risk that you would need to take.

I thought so, but then looking at above he wil not be my employee, but me contractor/service provider. Would that not change the onus? In the end I doubt Home Affairs has any chance to find the capacity within their ranks to find these things out and give me a fine. Maybe him, if they catch him. I am not really worried about that at this stage.

If, he needs assistance with his paperwork, please contact me on my e-mail address so that I can give you the contract details of someone who can assist him in getting his paperwork correct.

Thanks, I also know some connections, but he says all is prepared with a lawyer already ready to go when time comes.

Yes, if there are specific tasks that you wish him to complete - give him a little 'test'. I have found, many times in the past someone will apply for a position, saying that they know what it is that they are doing, but who clearly don't when they get to perform that specific task - bookkeepers who don't know where to post specific debtors or event planners who couldn't plan their escape out of a paper bag.
So, depending on what it is that you need done, let them 'walk you' through how they would do it - it might not be exactly how you would do it or even want it done, but it would give you an idea about whether they are capable of performing the task.

Good idea, must think about it how I can test him. Not so easy in my field.

Also, it might be a good idea to do a credit check on them -I know that all it would tell you is whether they are in debt or not, but it would also give you a bit of an insight into the character of the person and I know that you can do one ITC check per annum for free.

Sure, can't do any harm. BTW the free one is only for the person him/herself. Nobody can do a credit check on someone else without his/her permission. Well, one can, but if found out one can get into trouble. I simply ask him and do it anyway as I have access to that through my operations.

That's about it except - always listen to your 'gut feel' it's usually more accurate than anything else.
I hope that that helps

Thanks a stack

[MarcL]

Latching on to this old thread of mine I am looking for a simple work contract template which complies with the labour laws. This contract will only be done for purpose of my contractor's (employee's) work permit application or should I rather say change of employer. So the simpler the better. Can anyone help as this is fairly urgent.