Do You Need a Virtual Assistant or an Employee?

Understanding the Difference Between Working with a Virtual Assistant Professional and Working with an Employee

One of the biggest challenges Virtual Assistants have is helping a significant part of the marketplace understand that Virtual Assistants are not employees; the two are very different things.

In reading this, you might be wondering, “Huh? I just need someone to do my stuff.” But as a business owner intending to work with a Virtual Assistant, understanding the nature of your relationship is going to be critical to your success in working together, and making sure there is an alignment of expectations.

Sometimes a business just needs an employee. This is generally the case if you need someone to be solely dedicated to you and pretty much at your beck and call. Also, when you require control over the worker's schedule, how the work is performed, etc., you need an employee. You might also need an employee if the workload is so great that it simply requires a dedicated in-house employee to manage it.

But sometimes, having an employee isn’t an option for a business. It might be because there’s not enough of a workload to warrant hiring an employee (and all the attendant taxes and legalities that go with that). Or, you might not have anywhere to put an employee, such as if you work from a home office or are on the road a lot. Or, you simply aren’t interested in the extra administration, supervision and management that comes with an employee, and prefer to work alone.

When that is the case, working with a Virtual Assistant will absolutely offer you the very best, and most cost-effective, alternative in meeting your administrative support needs.

What the Difference?

A Virtual Assistant is an independent professional who is in the business of providing ongoing administrative support to business owners. As administrative experts, they can also help you streamline your business and instill systems and processes to improve your workflows and cost-effective operations. While Virtual Assistants do a lot of work that is similar to what an employee would do, it’s important to keep in mind that since they are not employees, there are going to be differences in how you work together.

You want to think of Virtual Assistants as administrative consultants. When you hire a Virtual Assistant, you are hiring an independent professional who runs her own business. That means, unlike an employee who is paid a salary to be solely dedicated to you and your business, a Virtual Assistant has other clients besides you to take care of. Virtual Assistants are also not paid a wage; they set their own professional fees, and have their own business policies, procedures and systems for working with clients.

The very best way to create a successful, mutually respectful relationship with a Virtual Assistant (and avoid costly liability due to worker misclassification) is to understand that you are a client to your Virtual Assistant, not an employer. That means you understand that:

• Your Virtual Assistant runs her own business and sets her own rates, hours, policies and procedures;
  
  
• You won't be managing or supervising her or him, or the work, in any way;
  
  
• Your Virtual Assistant doesn't "report" to you in the way that an employee would (e.g., reporting for duty, submitting time sheets, etc.); and
  
  
• You as the client have the right to control or direct only the result of the work performed by your Virtual Assistant, and not the means and methods of accomplishing that result.

More Resources

In the United States, the U.S. Dept. of Labor and the IRS govern what constitutes an employee versus an independent contractor relationship. A business owner who gets it wrong can wind up paying not only back taxes and penalties, but also all the expenses that the worker would have had as a fulltime employee, including overtime and benefits.

You can avoid all of that by simply understanding that your Virtual Assistant is a business owner—a vendor to whom you turn for administrative consulting services—and NOT your employee and treating the relationship accordingly. The resources below provide excellent information on understanding the differences so that you can establish a great relationship with a Virtual Assistant and avoid getting yourself into legal hot water.

United States:

IRS: Independent Contractor vs. Employee
IRS Publication 1779: Independent Contractor or Employee (PDF)

Canada:

CRA Publication RC41 10(E): Employee or Self-Employed? (PDF)

General:

Beware, The Contractor Trap
Your Rights as an Independent Contractor

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