User:TheBackpack/sandbox/per
A Portable Employer of Record (PER) is a business service that provides independent contractors and other contingent workers with support services typically found in a business, such as contract negotiation, payrolling, expense reimbursement, benefits plans, and collections. A firm that provides such services is also called a Portable Employer of Record (sometimes shortened to just Employer of Record.) The service is called portable because once the relationship with a PER is established, it moves with the worker as they change job assignments or clients.
Overview[edit]
Independent contractors are actually permanent employees of the PER. The PER creates a new unit or division within itself, with its own accounting of income and expenses, or (P&L). The PER then hires the independent contractor to manage the newly formed unit.
When the independent contractor finds work, the PER will negotiate terms with the client on the contractor's behalf. As the contractor works, the PER will bill the client, and credit any monies received to the unit. Applicable payroll taxes and insurance premiums are deducted from the amount received. The balance, or some other negotiated amount, is forwarded to the contractor as a paycheck, along with reimbursable expenses.
At the end of the year, the PER sends the contractor the proper tax paperwork as it would any employee. In the United States, this would be Form W-2, not Form 1099 as would normally be sent to independent contractors.
The net effect is that the contractor has the decision-making authority of being independent, with the legal benefits and infrastructure of an employee.
References[edit]
- Hardy, Michael. "Save money -- send work out: Consultants may be the future of managing government workforce." Federal Computer Week. Vol 17, No 41. December 1, 2003.
- Sriram, Subadhra. "Close Encounters of the Tax Kind: Use contractors without alienating regulators." Contingent Workforce Strategies. April 2007, Number 4.3.
- Whitehead, Jay. "Workstyles: MyBizOffice offers 'New Independence,' Part I. The Washington Times. Monday, July 19, 2004. D3.