When Mr X got hired, he was excited about his new job but the person who hired him called him something he did not quite understand. That’s “An independent contractor.” What does this mean? What are the effects? Does an independent contractor have the same rights as an employee?
The importance of defining your status, prior to employment, cannot be overemphasized, as an employee who is misclassified as an independent contractor loses all the rights and privileges of an employee and vice versa.
Who is an independent contractor?
An independent contractor is a self-employed person, that is, a consultant, lawyer, accountant, engineer or any other person who provides services to other organization for a fee. Common law principles further define independent contractor status by method of payment. If a person is on an employer’s payroll and receives a steady pay, clearly that the person is an employee and not an independent contractor.
An independent contractor is free from any control or influence of the client. He can apply his discretion concerning the manner and method of completing the task and whatever the outcome of the task, the independent contractor is responsible for it.
Who is an employee?
An employee is a person who works for the employer on a regular basis, in return for a remuneration called ‘salary’. The terms and conditions of the employment are described under a contract known as a ‘contract of employment’. An employee gives up elements of control and independence, is eligible for certain benefits and works within constraint of workplace.
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Why is it important to know a worker’s status?
The distinction between an employee and an independent contractor is very important. Apart from the fact that there are incentives for employing laboru, an employer must withhold Federal and State income taxes, Social security/Medicare from employees, but not from independent contractors.
If an individual is working as an independent contractor, the “employer” does not make any of these deductions and the independent contractor must pay his or her own taxes along with income tax on earnings.
What are the factors to consider?
Although there is no conclusive evidence, the factors to consider when identifying someone as an employee or an independent contractor are:
- What is the nature of work? – When work done is considered integral to the business, it is more likely that the person is an employee. On the other hand, work that is temporary and non-integral may imply independent contractor status. For example, a cleaner would not be doing ‘company’ work if he or she were working for a bank.
- The economic realities test – This test examines the dependence of the worker on the business for which he or she works. If a person gains a large portion of their salary from that business, chances are that person qualifies as an employee. The test also factors in such things as level of skill, integral nature of the work and intent of parties.
- What is the degree of control over work and who exercises such control? – When the hiring party controls the way work is carried out, the relationship between the parties is employer/employee. If the worker can set his or her own hours and works with little or no direction, he or she is probably an independent contractor.
What is each party’s level of loss in the relationship?
Is there any training? To perform tasks in a defined manner, an employee undergoes requisite trainings. An independent contractor on the other hand does not undergo any training for the provision of services.
Who has paid for materials, tools, supplies and equipment? – An independent contractor uses his own tools and equipment in carrying out a specific project but if the tools are provided by the business, it may imply an employee status.
The absence of a formal employment agreement – The presence of a written employment contract is a strong indication of an employer/employee relationship.
What type of skill is required for work?
Is there a degree of permanence? – An employer/employee relationship has a higher degree of permanence as there is a greater level of job security.
Written employment contract
The presence of a written employment contract is a strong indication of an employer/employee relationship.
Under the Labour Act, an employer must give its employee, a written employment contract, no later than three months after the start of the employment period.
The employment contract must include the following information:
- the name of the employer or group of employers;
- the name and address of the employee and the place and date of their engagement;
- the nature of the employment;
- if the contract is for a fixed term, the date when the contract expires;
- the period of notice to be given by a party wishing to terminate the contract; and
- the rates of wages, their method of calculation, and the manner and periodicity of payment of wages.
Any terms and conditions relating to:
- working hours;
- holiday and holiday pay;
- incapacity to work due to sickness or injury, including any provisions for sick pay; and
- any special conditions of the contract.
Are there any grants or incentives for employing people?
Labor intensive industries are entitled to tax concessions. Concessionary rates are progressive so that;
- Industries employing 1,000 persons or more benefit from a 15% tax concession.
- Industries employing at least 200 persons benefit from a 7% tax concession.
- Industries employing at least 100 persons benefit from a 6 % tax concession.
Before coming to a decision as to whether to employ a person or hire an independent contractor, you have to realize what the nature of the job is, what are your requirements and expectations? You also have to consider if it saves more money hiring an employee or an independent contractor.
How to prioritise your needs over wants
It is crucial, as a financially oriented person to learn how to prioritise your needs over your wants.
To become financially stable, you have to learn to make some strategic decisions, and one of them includes prioritising your needs over your wants. The things you need are the things you cannot do without, your necessities, which include; shelter, healthcare, food, clothing and other essential items. Wants, on the other hand, are the things you can live without. For people who want to be financially responsible, wants are considered luxuries. It is crucial, as a financially oriented person to learn how to prioritise your needs over your wants. If you buy everything you feel like buying even when you don’t need them, you are being financially irresponsible, and it might have a massive effect on you. If at all you are going to spend on your wants, it shouldn’t take more than 10% of your monthly income. The deal is; if you want to buy the things you want or desire, you should earn more money.
The needs of men are grouped into three (3), according to Abraham Maslow’s hierarchy of needs. They include;
- Self Fulfillment Needs
- Psychological Needs
- Basic Needs
If your needs don’t fall into any of these groups, then they should be considered as wants.
How do you prioritise your needs over wants?
1.List your needs and wants
Writing down your needs and wants will go a long way in helping you to prioritize. Your needs should come first while your wants follow. Your needs should include your house rent, your feeding allowance, your medical fees, and other basic needs, in order of importance. You can group your wants into a hierarchy of priority and move the ones you cannot afford to the following month.
2. Research the prices of your needs and wants
Research the prices of the things on your list and affix. They might not be the exact prices and might be in ranges, but it is good that you do this. This would help you to calculate how much you might be spending in a month and if it fits your monthly income. With this, you will be able to remove the things that might put you in debt. The goal at the end of this should be to spend lesser than your monthly income and have enough for emergencies. This helps you to focus more on your needs rather than wants
3. Cut all luxuries
As far as basic needs go, there are some rules to it. It is essential that you eat, but you don’t have to eat at restaurants when you can cook at home and save costs. If you can’t cook, you can also check out some cheap restaurants instead of the big and expensive ones. Also, if you are not financially capable to rent a big apartment, look for smaller and less expensive options that would help you to save cost. Some basic needs can become wants if you don’t watch it.
4. Get multiple sources of income
The way this works is, if you get more sources of income, you get to settle all your financial needs which are your top priority, then you don’t find it difficult to buy the things you want. To prioritise your needs over your wants then becomes more comfortable.
5. Be sincere with yourself
Be realistic in your budget and don’t list out the things you cannot afford. If some of your needs will make you spend more, look for cheaper alternatives. You are the only one seeing your budget.
As stated above, some of the basic needs include; food, shelter, water, clothing, security and so on. They are the things that might kill you if you don’t have them. It would help if you considered these basic needs first when creating your monthly budget. Having satisfied these needs, you can go ahead and get the things you want. Never choose your wants over your needs. It is a risky financial move that might make you go broke and run into debt.
ATM Fraud: How to care and use your card wisely
To protect your card from external harm, there are few tips you must acknowledge and start getting familiar with.
The Cashless Policy, as we know it in Nigeria, was officially introduced and became fully operational in 2014 – with the aim to encourage electronic banking and to reduce physical cash in circulation – which would in turn decrease cases of cash-related crimes. One way of implementing this policy is through the use of ATM cards.
It is true that the advancement of technology has generally made our lives easier and more convenient. But, the adage “whatever has advantages, also has disadvantages” is not left out in the case of electronic banking. With the development of ATM machines and electronic cards for mobile banking, there are some risks and exposures associated therewith.
Some of these could devastatingly leave you broke in the blink of an eye; whereby, you find out the money you have worked so hard to accumulate has vanished with the stroke of some keys.
The Cashless Policy was met with e-banking fraud. There were reports of banks and individuals losing a lot of money to fraudsters, despite the regular checks put in place by financial bodies to curtail the loss of an individual’s hard-earned money.
The onus, therefore, falls on all responsible individuals to guard and protect their assets – Yes, your ATM card is an asset.
It is important to know how to handle your cards and make sure you’re not only using it correctly but smartly.
Automated Teller Machine (ATM) means a machine that dispenses cash and also performs specific banking services at the user’s convenience.
It is a dedicated payment system and the ATM card is issued by banks and other financial institutions for ease of financial transactions. It usually comes in the form of debit cards, which means you must have monetary assets with the said bank, to be able to use the card for transactions.
In order to handle your card wisely, you must be intentional about the money that comes into and goes out of your pocket. You cannot leave anything to chance. Have a plan for your money and stick to it.
To protect your card from external harm, there are few tips you must acknowledge and start getting familiar with.
- Protect your pin: You must not give out your Personal Identification Number. As the name connotes, it’s your very own personal form of identification, which grants you electronic access to your money. If for any reason your PIN gets exposed, you must immediately reset it. Furthermore, do not write it down on a piece of paper or if you must, do not leave it exposed or in your wallet
- Always report suspected cases of fraudulent activities: When you’re in the know about your finances, any discrepancy will immediately come to your notice. Some people do not recover from cases of fraud, because they didn’t discover it on time. Remember that the earlier you report a problem, the sooner it gets resolved. On this note, you must always be familiar with all bank transactions and statements. If you notice at any time that your card is missing – especially when you’ve been out with it, and you suspect it’s been stolen, report it immediately and block that card.
- Be cautious of the ATMs you use: Always use one that is associated with banks. Avoid any machine that may be situated in suspicious locations. In as much as it grants ease as a means of solving our problems, compulsive use of your ATM card should be avoided. Even with the extra charges attached to card transactions these days, you really would be doing yourself a favor by being careful of where you insert your card in your bid to avoid bank ATM charges.
- Do not be careless with your phone: Try as much as possible to avoid being careless with your phone or any other device that may contain your bank information. Always create security profiles for your gadgets. It doesn’t take much for someone to access your details and wipe your bank account clean. Make sure that your phone is protected by a password or pin and whenever possible, delete traces of money transactions from your gallery or messages, after you must have successfully backed them up of course. Just remember that your card information could be contained on your phone and leaves you to exposure if mishandled, so handle with care.
- Do not use public wireless connections for financial transactions: In fact, you should always be wary of all public wireless access. It is a fast and unsecured way for a third party to gain access to your private information. You could as well leave that information on a billboard for the whole world to access. Be sure to use password-protected wireless connections, it makes it more difficult for hackers to access your details.
Try to change your pin every few months. Keep it simple and short, only using codes you can remember.
Conclusively, while it is very convenient to use debit cards or ATM cards for financial transactions, you wouldn’t find it funny to learn that someone has emptied your account on the spot. Hence, it is important that you take precautionary measures to always keep your card safe.
CBN reveals framework for the N75 billion Youth Investment Fund
The Nigerian Youth Investment Fund will be funded through the NIRSAL MFB window of the CBN.
The Central Bank of Nigeria (CBN) has revealed the implementation framework for the Nigerian Youth Investment Fund.
This was disclosed in a publication by the Development Finance Department under the auspices of the Central Bank of Nigeria.
The CBN stated that the Nigerian Youth Investment Fund (N-YIF) would be funded through NIRSAL MFB window, with an initial take-off seed capital of N12.5 billion.
The N-YIF aims to financially empower Nigerian youths to generate at least 500,000 jobs between 2020 and 2023.
Objectives of the scheme:
Improve access to finance for youths and youth-owned enterprises for national development.
Generate much-needed employment opportunities to curb youth restiveness.
Boost the managerial capacity of the youths, and develop their potentials to become the future large corporate organizations.
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The fund targets young people between the ages of 18 and 35 years.
Beneficiaries of NMFB, TCF and AgSMEIS loans, and other government loan schemes that remain unpaid are also not eligible to participate.
Individuals (unregistered businesses) shall be determined based on activity/nature of projects subject to the maximum of N250,000.
Registered businesses (Business name, Limited Liability, Cooperative, Commodity Association) shall be determined by activity/nature of projects subject to the maximum of N3.0 million (including working capital).
The tenor of the intervention is for a Maximum of 5 years, depending on the nature of the business and the assets acquired, of which interest rate of not more than 5% under the intervention shall be charged annually.
The Federal Ministry of Youth and Sports Development (FMYSD) will collaborate with relevant stakeholders to identify potential training for training/mentoring.
The youths that are duly screened (and undergo the mandatory training where applicable) shall be advised to login to the portal provided by the NMFB to apply for the facility.