Great post!
Sampath

There are only two work models in the US: employee, and business owner. Freelancers are business owners, but too few of them know that, or have taken the time to actually put firm foundations under their businesses.

Likewise, too many people looking for part time help pay people as freelancers (1099 contractors), when, if the IRS looked, those people would be classified as employees, and the people who paid the workers as contractors would be in a whole heap of trouble.

If the person with the work to be done has the worker in her home, more-or-less when she wants the worker there, tells the worker what needs to be done, how to do it (how the person with the work wants it done), provides the supplies/equipment for the work to get done, and tells the worker how much she’ll pay for said work, the person with the work is an employer, and the worker is an employee.

It doesn’t matter if that worker does similar work for other people with similar work needing to be done in their own homes. What matters *most* is that the worker is either treated like an employee, or as a business owner. Employees are dictated to. Business owners are not.

I’m not sure why this gets muddy with things like personal assistance, or domestic help. If a plumber is needed, the person with the need doesn’t tell the plumber how to do his job, or when, or provide equipment or supplies, or dictate the rate the plumber will be paid. It just isn’t done. The plumber–the business owner, and expert service provider who provides plumbing services–calls the shots, and the person with the need either retains his service, or not.

So should it be with domestic workers or assistants *unless* they are actually going to be employees, and are going to be paid as such. And to be clear, an “employee” never gets a 1099.

As for advice to follow for those who want to actually be service business owners with regard to setting fees–and more specifically to those who are providing specifically as assistants doing mostly administrative work, it’s really not as simple as charging twice the hourly rate one would be paid as an employee, because whatever that figure is may simply not allow a person to be profitable in own’s own business. It’s critical to be profitable.

To see what assistants are paid, The Bureau of Labor Statistics offers up the 2007 National Occupational Employment and Wage Estimates. You can see the most appropriate wage table here: http://www.bls.gov/oes/current/oes_nat.htm#b43-0000

In my 12 years as a professional business coach, and as the person who formalized the Virtual Assistance profession and has trained nearly 1000 people to own their own successful (and profitable!) Virtual Assistant businesses, I’ve never found anywhere (in North America) where anyone could be profitable in business for him/herself for less than $30/hour. There’s simply no way to do it. AND, depending on one’s expenses, $30/hour may not be profitable, either.

Bottom line–a person needs to be in business for herself, or be an employee, but should never assume that the person with the work is going to steer her in the right/best/sound direction. Workers should never abdicate their responsibilities to do what’s best for themselves. When they take care of themselves, they’ll also be better able to do great jobs for employers–or clients.

Thanks for the opportunity to contribute, Erica!
Stacy

TOOT: If all of the home based business owners keep going offshore for help, bragging about paying $2 an hour for their new assistant – how will Americans be able to buy their products? Henry Ford made his employee wages higher so that they could buy HIS cars. Food for thought.

Cheers!
Prime

BTW, I wouldn’t count on a politician to take care of anything. I hope Obama does great things, esp for people who can’t help themselves. Your readers know how to take care of business and should do so in the case of their health needs.

As you say – folk who are willing to do a great job would pick up plenty of work freelancing. But many just aren’t willing to do so, because they’re not business savvy and don’t want the additional responsibilities. And the ones who are would probably employ others and hire them out, which makes it more expensive to those of us who want to hire them. I paid my last assistant well but an agency was going to charge me almost double to replace her.