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The Stimson Group Newsletter
May 2008
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Vol 2 Issue 5
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Welcome Back,
I am gearing up for InfoComm, and I hope you are too. Please check out my itinerary below and let me know your plans as well.
This month's Best Practices installment continues our look at working with freelance staff. My journeys have shown me that far too many stagers are taking big risks in how they manage freelance payroll and insurance.
The April Trends Survey focused on YTD revenue results, comparisons to last year, and outlook for the remainder of of 2008. Find out if your company is keeping up with the market.
If you enjoy these emails and get value from the content, please do me the favor of forwarding this month's issue to a few friends or colleagues. You could also drop me a note with a question, comment, or idea for a future article.
Enjoy,
Tom (TR) Stimson, CTS
My Direct Email
Website
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See YOU at InfoComm
I expect to see all of you at InfoComm in Las Vegas, June 15-17 for pre-show classes and events and June 18-20 for exhibits. Here is my itinerary so far: Tuesday, June 17,
IST6: How to Prepare for the Certified Associate Project Management (CAPM) Test. This is an 8:00 am to 3:30 pm intoduction to project management seminar. I recommend that everyone send their Project Managers and Sales Coordinators to this course (or one like it somehwere). For professional Integration Project Managers, there is a comprehansive three day course offered at InfoComm. InfoComm Opening Reception, 6:00pm to 8:00pm. This event has evolved into a must-attend AV celebration. Great conversation, renewed acquaintances, and lots of strategic hob-nobbing - it's as much fun to watch as it is to participate. NSCA Expo Jam, 8:00pm to 10:00 pm. In a new partnership with NSCA, InfoComm is hanging up its Battle of the Bands to make room for NSCA's Expo Jam tradition of pre-show concerts. Wednesday, June 18,Ribbon-cutting, 8:45am, Main Exhibit Entrance - This will be my first exhibit floor opening as an Officer of InfoComm. Come see me wear a suit and tie while operating very large scissors. Rental & Staging Council Forum, 2:30pm-4:00pm, Las Vegas Hilton, Ballroom A. Once again I will be moderating the Rental & Staging Council Forum. This is a not-to-be-missed event that is always fun and informative. This year's topics and panelists will be announced just before the show. Rental & Staging Council Reception, 4:00pm-5:30pm, Las Vegas Hilton, Ballroom A. Now in its fourth year, this reception has really GROWN! You can run into the entire Who's Who of AV R&S in one room. Come enjoy some free food and beverages while swapping show stories. You don't need to be a Council member to attend. Thursday, June 19,IS37: Rental & Staging Business Survival Kit, 8:00am to 10:00am. This is a NEW course prepared by yours truly, Tom Stimson. I take many of the topics you have read about in AV Matters and expand them in a busy two-hour seminar: Learn the ropes of and staging best practices in equipment utilization, sales and project management, warehouse operations, technician development, incentives and key business metrics. Get answers about rental software, compensation, commissions, prioritizing capital purchases and finding new employees.
InfoComm Staged Events Awards & Reception, 3:30pm. This year's awards are sponsored by Lighting & Sound America and will be presented on the InfoComm Booth stage in the LVCC lobby between North and Central Halls. Somewhere in all this will be time on the InfoComm and NXTcomm exhibit floors, meetings with clients and prospects, and lots and lots of Starbucks. Contact me soon if you would like to carve out some time to chat. |
R&S Monthly Trends Survey
April '08 Results
How do you think the economy is affecting business? Over 100 respondents answered that question with some fascinating comments. This month's statistical analysis suggests that we may have seen the worst already. XX% of our survey respondents say they are upping their forecasts for the remainder of the year. Should you be among them? Download the results and see for yourself.
May Survey Preview
Before you buy your next projector or flat panel, how much customer demand is there for HD products? Take this quick survey about HD rental activity.
Take the survey now.
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Best Practices Installment
Working with Freelance Professionals (Part 2): Better Safe Than Sorry
(My apologies to my Canadian readers. This is a US-centric article. Please write and tell me how this varies in Canada. -TS)
You hire a freelance Audio Engineer to do a show. He does a good job and sends you an invoice. You write him a check and say thanks. Business should be as simple as this, right? Sorry. During the show, he stepped off the control deck and shattered his leg. He needs extensive medical treatment and rehabilitation and will be unable to work for at least nine months. His workers' compensation claim was declined because he wasn't covered under your policy. Now you're being sued on the basis that he was technically your employee. You respond by pointing out that the freelancer signed an independent contractor agreement clearly exonerating your company from any liability. Will you prevail? Probably not.
In general all independent contractors are considered employees unless it can be shown that they are not. The IRS has provided a twenty-question guideline in regard to this with the two most important tests pertaining to direction and control. When you specify work hours, location, and method, the worker is classified as an employee. On show site you have an advantage in that the skilled technician is not necessarily under your direct control, probably provides his or her own tools, and is paid for the job not just the time. When you hire a freelancer to come to work in your shop, you have control over when, where, and how they perform their service. Interpretation of these criteria will vary from state to state and auditor to auditor, but in general that individual is acting as your employee.
Who's Really Independent?
So I expect that right now a little voice in your head is screaming, "Everyone uses freelancers and no one calls them employees!" It is indeed an industry-accepted practice to hire independent contractors on an hourly rate with some sort of guaranteed minimum booking. This could be a stagehand for a four-hour call at twenty dollars an hour or a camera operator for three hundred dollars a day based on a ten-hour day. In theory the contractor is responsible for filing his or her own taxes, receives no company benefits from your firm, and is not eligible for unemployment benefits at the end of the job. In a perfect world, there is no reason to challenge these practices. However, many companies unintentionally create an employee-employer relationship. Some common practices that undermine independent contractor status include the employer doing any or all of the following: defining work periods, specifying pay rates, supervising all work, providing training, or using the contractor in the same non-exempt activities as its other employees. When any of these circumstances exist the worker may become eligible for unemployment benefits when the job is over or workers' compensation if they get hurt on the job. If they qualify as a fulltime employee then you might be responsible for additional benefits as well. If there is some doubt as to the status of the worker, classifying them as an employee poses fewer potential risks to the employer.
So what makes the independent contractor truly independent? The key is for the freelancer to behave like a business, which involves three conscious steps.
- They need to operate under a business name.
- They need to have a tax number (EIN, not a Social Security Number) and provide it to you on a W-9 form.
- They need to provide proof of workers compensation and general liability insurance.
It is possible for an individual to do all of these without incorporating or incurring significant costs in most states. Other states may require as much as 4% of wages to cover workers comp. You should expect your freelancer to pass this cost on to you.
Workers Compensation Insurance
Workers Comp Insurance is designed to pay for medical treatment, rehabilitation, and provide disability pay for workers injured on the job. The employer pays the premium and the worker receives the benefits. Many states do not require Workers Comp for smaller companies, but that generally does not lessen your liability. Best practices suggest that a company's only real defense against a future workers' comp claim from a freelancer is to require that the independent contractor provide proof of worker's comp insurance prior to any incident or include that worker in your coverage. If you choose to include your freelancers on your firm's workers comp policy, this will provide them coverage and protect your company. This will also create a potential employer-employee relationship, which could make the worker eligible for any disability and paid time off benefits enjoyed by your other employees.
Labor Brokers or Agencies
When you hire stagehands or technicians through an agency or broker, that entity is the employer of record. which may reduce your exposure. Nonetheless, it is still best to require the proof of insurance for both workers compensation and general liability from the agency. While most states do not require workers comp that does not mean you should operate without it. The risks far outweigh the costs. Even if you book labor through another party, that does not remove you from the chain of liability. Technically you could still be sued if the injured worker's agency is uninsured (or under-insured) or if your direction somehow contributed to the injury. Again, it is best to seek the advice and counsel of an insurance professional for your specific business and locale.
What I hope everyone understands is that there are some labor issues that are dictated by law and others that are guided by choice. It is necessary to know and follow the laws of your state or seek the counsel of a professional. When choosing how your firm handles staffing choices, the issue is how much risk you are willing to take. Making uninformed choices about workers comp and employee status can lead to devastating results when a worker or freelancer chooses to challenge you on their employment rights. There are a number of free resources online that can help you with further research. Your state's employment department or agency is a good starting point. Even if you believe you are already addressing the issues raised here, it would be worth your time to dig a little deeper.
(This excerpt was originally published in Staging Rental Operations magazine in January 2004.)
Tom Stimson, CTS
Comments or Questions? Send me an email.
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Q&A
Good Morning Tom,
I had the pleasure to sit in one of your classes at InfoComm last June in Anaheim. The class was "Emerging Event Staging Operations" and I was able to take away a couple of thoughts that have been beneficial to me and the operations here at the Des Moines Markey's office.
Our business here in Iowa is growing and we are in need of some larger in-house show projectors. We have settled on Christie 8K projectors, but are mixed as to go with standard DS+8K or look to the future and go with the HD8K, and this decision is hinging on what kind of market predictions are out there on how soon the R&S convention industry will change from 4x3 format to 16x9 projection screens. Since most of here in Iowa really don't know, I thought that I would put a feeler out to you and see if you have any insight that you could provide.
Thank you for your time and any effort that you take on my behalf.
Sincerely,
Michael Young, CTS
Rental Operations Manager
Markey's Rental & Staging
Des Moines, Iowa
Michael,
Your question is very timely because I have recently shifted my stance on 16:9 from hold to buy. The Christie HD8K is a great choice and will still allow you to handle 4:3 at higher resolutions than most convention customers require. When you consider that laptops are starting to ship with 16:9 screens and that in ten months, television signals will force customers to embrace HDTV - then I think this is the right move. However, I know there is a cost differential between the 4:3 and 16:9 formats. So your question really is, "Will I need 16:9 during the lifetime of this purchase?"
The answer is still yes, but now it is strategic. I would want to be the only AV Rental Company in a market that can project native HD on larger screens. There is a small hurdle in that you then have to now allow for projection screens in 16:9 and you have to educate customers on how to balance a mix of 4:3 and 16:9 content, but most customers understand this from their home television experience. It also means you can rent your windowing scaler products more often.
So, I think the switch is happening. Jump on board and commit to supporting HD and 16:9.
Have a comment about anything you've read? Email it to me.
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 About Thomas R. Stimson, MBA, CTS
Tom
Stimson is celebrating over twenty-five years in the communications
technology industry. As a Consultant, Tom helps companies build
smoother operations, focus sales, and increase profit. For more
information visit the website.
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