SAAC Board Member
Jay Lewitt, Every Promotional Product
Legislative & Governmental Chair

Ever since I have had salespeople working with EPP I have wondered if they were really independent salespeople or employees. The only real reason I even care a little is because I want to know how the IRS views them. The issues  come up in a lawsuit or an audit, nothing real fun.  But if you are a business owner or if you sell for someone else it is a serious matter.
Every time I ask my CPA about the classification he points to the 20 common law factors  that the IRS has developed and published in Revenue Ruling 87-41.

They are pretty basic and deal with common daily work activities. I will list some of  them here so everyone will be able to know more about the law. I added some analysis specific to our industry.

1.       Instruction.  Does the Employer tell the salesperson what to sell? How much to sell it for? In our business typically not. If the salesperson get the order they went in too low. If they don’t get the order they went in  too high. But the salesperson makes that decision.  Thus the ad specialty salesman is more of an independent contractor.
2.       Training. Does the person for whom the worker performs services train the worker? In our business the training is usually on the job experiences. The best training I get is when I don’t get the order. I try to make sure next time I learn from the experience. The lack of real training in our industry makes the salesperson more like an independent contractor.
3.       Services Rendered Personally.  In our case the salesperson deals directly with the customer. The salesperson  decides whether to call, e-mail, tweet, facebook messenger, do a drive by or make a formal meeting.  The customer is the real boss, we all know that. That certainly makes the salesperson more like an independent contractor.
4.       Set Hours of work: Does the person for whom the worker performs services set the hours of work? Every salesperson I know works when they want to work, and how much they want to work. In our business they work real hard when  their customer wants promos. The employer does not set the hours the salesperson works, but I bet a lot of them would like to.
5.       Payment of business expenses:  You do not reimburse your independent contractors for hotel rooms at the Luxor Hotel for the PPAI show in Vegas.  And if you do and you classify them as independent contractors then you better find a great CPA and lawyer if you get audited.

After analyzing all 20 elements the bottom line as to whether the promotional salesperson is an independent contractor or an employee comes down to one word. CONTROL. Does the employer have control over the salesperson.  After more than 20 years in this business I believe the salesperson is really an independent contractor on just about every issue except for one. The only element where the salesperson is more like an employee is that an employee works for one firm whereas an independent contractor works for many.  I have never met a salesperson in this industry that sell hats  from Halo AND pens from Promoshop.
I would love to hear your opinions and comments about this issue.

I will be providing updated blogs as Steve Parker, Rod Brown, Jon Henrickson, and I, attend PPAI L.E.A.D March 7-8.

Best, Jay

THERE IS NO AFFILIATION WITH SAAC!!!

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This firm has absolutely NO AFFILIATION with SAAC. Any communication regarding the SAAC Show Directory and listings will come directly from the SAAC Office.

If you have any questions, please contact the SAAC Office.

The SAAC Team
Specialty Advertising Association of California (SAAC)
805-484-7393
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Photos from this year’s Show can be viewed by clicking this link.

Annual Holiday Party

Comedy & Magic Club in Hermosa Beach
December 13, 2011

Live at the Lounge

Arrival 6:45 – 7:30 pm
Dinner Service 7:30 – 8:45 pm
Show Time 8:45 – 10:15 pm

Dinner entree: (You will need to indicate your choice when you register)

• Grilled Marinated Ribeye
• Rosemary Chicken
• Salmon in a Lemon Caper Sauce
• Artichoke Ravioli in a tomato basil sauce
• Dessert – Berry Sorbet

Two premium drink tickets per person

Click here for address and directions.

Reservations will be confirmed upon receipt of payment. If paying by check, please mail to the SAAC Office, 1200 Paseo Camarillo, Ste 100, Camarillo, CA 93010. We will be unable to accept payments at the Comedy Club.