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Non-Compete for Independent Contractor turned employee

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in HR & Employment Law Vote Up0Vote Down

Hello,

I am stuck as to what is needed for our current situation.

We hired one of our independent contractors as a salary employee. However, on some cases, depending on her work load, she will be given the opportunity to take assignments as an IC should her schedule allow.

How would someone suggest we put together the non-compete? We have a standard form in place for employees, that covers everything, but does anyone have a suggestion when our new employee will be working for us as an IC and as an employee? Is a different one needed?

 Thank you for your help!

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Comments

  • 3 Comments sorted by Votes Date Added
  • TXHRGuyTXHRGuy 1,586 Posts
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    The scope, limits, and enforceability of son-compete agreements varies widely across states.  You will need to see counsel to get this one right.  You will also want to talk to counsel about the employee/contractor distinction to ensure you don't get into any difficulties there.
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  • HRforMEHRforME 497 Posts
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    I'd be more worried about the ee/IC issue. I hope that you mean that she would do IC jobs outside of your company and not paid for IC work within your company.

    Either way, neither is a DIY project and I agree that counsel should be sought on the front end.

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  • IT HRIT HR 595 Posts
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    I agree with others. I have been repeatedly told that having someone as an EE and an IC is a huge red flag with the IRS.  I would get your accountant, tax attorney, etc. involved in this to make sure you are not opening yourself up to an audit.

    I can tell you that in the state I am in, they are on a huge crackdown on ICs. 

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