Is a Virtual Assistant Considered an Employee to a Company?
There seems to be much confusion out there among many people over whether or not virtual assistants are considered employees or not. That answer is simply put; no, they are not employees. Virtual assistants work as independent contractors. That means that they are not strictly employed by one company, they may do work for one business, but they are free to work other projects as well for other businesses or "clients". They are hired on a per project basis and only when the business needs to outsource for extra help. This is at an advantage to both the company and the virtual assistant for cost reasons and more importantly, freedom.
A virtual assistant, as an independent contractor, does not get payroll taxes deducted from their paycheck. They are paid [usually] by online means and must keep a record of all the payments that they do receive. Independent contractors do not receive a W-2 at taxtime, but are required to file self employment taxes if they make enough to go over that threshold. Independent contractors usually will not receive a 1099 unless one company has paid them more than $400. Alternatively, if the independent contractor has received less than $400, they do not have to file for self employment taxes.
Often, virtual assistants may get mistaken for a virtual telecommuter. A virtual telecommuter is an employee who gets hired by an online helpdesk or an online call center company. They are not contracted but are actually hired and do become employees. These two jobs may sound and seem the same but they are not. They are just very closely related. A virtual telecommuter will receive a W-2 and will have payroll taxes deducted from their paychecks. They do have to follow company policy and procedure and usually have sick days, paid vacation time, benefits and so on. Of course, some virtual assistants who are starting out do become virtual telecommuters for many reasons, but the job descriptions and duties are polar opposites.
So what exactly is the difference? (We will use VA as Virtual Assistant and VT for Virtual Telecommuter)
- A VA is in business for themselves. They have their own policies, procedures and their own plan. A VC is employed by one specific company and is an employee of that business. They have to follow the policies and procedures of the company.
- A VA has to file their own taxes and pay self employment taxeson the amount that was not initially taxed. A VC receives a W-2 since payroll taxes were deducted from the employees paycheck.
- Technically (although the terms are sometimes misused) a VA is outsourced or contracted and a VC is hired. A company may say,"I outsourced/contracted a Virtual Assistant" rather than say "hired". (Although, that is a common term as well. It adds confusion to this already confusing misconception.)
- A VA sets their own hours and works when they feel it is in their best interest. A VC has set hours they have to work per day/per week.
- While a VC gets paid one hourly rate no matter what work they do, a VA sets her own pay and can tweak it up or down depending on the project the company needs.
Are Virtual Assistants treated like employees?
Sometimes they are and sometimes they aren't. When I say treated like an employee, I mean the way the business acts towards the virtual assistant. Occasionally virtual assistants and business get along extremely well, that business will keep contracting that virtual assistant todo various jobs for them. Some business owners get close with the virtual assistants and will be in constant contact with them for various reasons. Then, there are companies who look upon the virtual assistants strictly as independent contractors and have a strictly professional relationship with only contact due to jobs. Some companies may contract the VA just once or twice for jobs and will give strict rules of what they want. The difference is the company and the relationship the VA forms with the company.