The Online Business Center

This is another issue requiring some important decisions if you are a small business owner. Your employees certainly need health insurance and are probably entitled to expect it. However, the prohibitive costs of group health plans have made it almost impossible for the small business owner to provide it for employees even if they wish to do so. According to statistics, it now costs an average of more than $4,000 per employee per year and the costs are rising due to a number of factors such as complexity of treatment, unnecessary care, stress claims and defensive medicine.

There is also much controversy about this area in the government sector. Regulatory legislation is pending that may require every business owner to provide health plans for all employees working over a certain number of hours.

In order to get away from paying employee benefits many companies, including major corporations, are hiring personnel through temporary agencies. There are both state and IRS rules that apply to non-employee (or contract) services. Be aware of the fact that these restrictions exist and be sure that you are properly classifying your workers. Classifying an employee as contract services when he or she is actually an employee carries some heavy tax penalties.