Should You Hire Family, Friends or Even Customers?

If you’ve considered hiring family members into your small business, here are some things you may wish to consider.

From a purely financial perspective, hiring a family member can be a good idea. Doing so can be considered a legitimate business expense and, especially if your firm is a small corporation, can lower your tax liability.

And yet….

It’s imperative that you hire a family member, friend or even customer in a professional and business-like manner. Here’s why:
Friends and family members could try – consciously or not – to take advantage of his or her connection. What will you do if your spouse or son or best friend starts taking too many “sick days” or leaves early too many times for “important” appointments?

You hired the person, but are you ready to fire him or her as well? Firing a close friend or family member inarguably is one of the hardest things you’ll ever have to do in your business, and can cause an unbelievable amount of stress between you and your loved one.

You also should keep in mind that the IRS takes a look at family member employment very carefully, looking for instances where a business hires family members solely for the tax advantages. You must be sure that your family member actually works, earns a competitive wage and, most importantly, that you enforced your company’s personnel policies equally with all your employees.

Below are some tips to help you avoid the sticky wicket that can be employing family members, friends or even loyal customers in your business:

  • Create a crystal clear job description for all employees.
  • Make sure all employees submit time cards weekly, every two weeks or monthly.
  • Set specific hours for all employees
  • Have in place written policies for all employees regarding paid holidays, benefits, retirement plans and any other programs your company may sponsor.

Finally – and this is critical – treat your friends and family members just as you would other employees. Make sure your “personal” employees treat you as the boss, not as a good friend (or “Dad”). Hold them to the standards you expect of your other employees in regards to hours, dress, vacation time, etc.

If you need great employees in the Inland Empire, turn to Arrow Staffing. We can help you find skilled and reliable workers for your temporary, temp-to-hire and direct-hire assignments. Contact us today!

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