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

Following is a message PPAI sent that we feel is important to pass on.

Action Needed Now

President Obama has issued an Executive Order instructing all Federal agencies and departments to limit the purchase of promotional products, particularly plaques, clothing and commemorative items.

We need you to contact the White House right now and ask President Obama to reconsider this directive. Then you need to contact your member of Congress and let him or her know that the President’s Executive Order could harm this industry and pose a threat to small businesses throughout the country.

Do Not Put This Off—Take Action Today To Protect Our Industry.

ACTION REQUIRED:
You need to communicate with both the President and your members of Congress. Because mail no longer gets through to Congressional offices in a timely fashion, it is essential that you call, e-mail and fax your Representative and be sure to identify yourself as a constituent in the e-mail header:

1. Call the President using this phone script.
2. E-mail the President.
3. Call your members of Congress using this call prompt and script.
4. E-mail your members of Congress.
5. Fax: Visit PPAI’s legislative software online and use the zip code search engine on the site to access your Representative’s website. You will find the fax number there.

While it might be tempting to limit the purchase of promotional products in order to yield some short-term savings, in the long term, this limitation may unintentionally diminish the good work of Federal agencies. Time and again, promotional products have proven themselves to be the most cost-effective way to reach a very targeted audience in a tangible, long-lasting and memorable manner.

Viral, mobile, highly targeted and inexpensive, promotional products are the only advertising medium capable of engaging all five senses. Many legislators don’t yet know that promotional products are the most cost-effective method for smaller businesses to market their products or services. Too few elected officials know how essential promotional products are to the marketing mix and the industry, to the national economy.

No matter what the nature of the conversation, follow up the phone call with written communication by fax or e-mail. Please share copies of your correspondence with PPAI. We would also appreciate any report on the results of your efforts.

Questions, comments, concerns? Contact PPAI Public Affairs.

Like many of you I joined SAAC when I got into the promotional products industry. I went to the SAAC Show in San Diego, then when the show moved to Long Beach I moved with it. I went to some SAAC education days and an occasional SAAC party. I always liked SAAC and when the renewal form came in, I happily sent in a check. I never had any idea how people got elected to the Board , how long the terms were and if there were term limits.

Our board is a non-profit corporation governed by bylaws that we must follow. We just had a very competitive election and becoming a SAAC Board member is becoming very popular, which is a terrific trend from our perspective. I suggest the best way to become a Board member is to volunteer on a SAAC committee. There are many committees and one or two that would fit your interests and skills. We need your involvement. You can give back to our great industry. You can meet others who also value giving back. You will have a better understanding of SAAC, and will know if you want to run for a Board position. You will also have a much better chance at getting elected by being visible and getting involved.

If you want to get involved in this great organization e-mail the SAAC office.

THERE IS NO AFFILIATION WITH SAAC!!!

Click here to view a sample of the materials previously mailed to SAAC and our exhibitors.

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
805-388-7666 FAX