Expert: Shirley McAllister, CPP, PHR - 2/28/2011

Question
This is similar to a question you have answered but for me, more complex.

I have a Canadian company that wants to hire me as a sales representative based in Ohio.  They are in the process of setting up a US subsidiary, getting an EIN number etc.  The problem is that they want me to start working for them but everything isn't set up yet.  They might have to pay me as a consultant initially (a couple of months) until everything is properly set up.  They will be going through Ceridian to do the payroll when they are ready.  Can I be a "contract" employee for a short period of time, then become an "employee"?  Do they have to set up the US subsidiary or can an ADP or Ceridian set up US payroll without it?  I just want to make sure we are both covered and not doing anything wrong.  Thanks.

Answer
The Canadian company will have to set up all the business registrations and accounts, however, Ceridian will assist them with that and how to do it.

Ceridian actually does the payroll and pays the taxes to the agencies, they will also do the W-2's at the end of the year for tax purposes.

It is fine to be an independent consultant for a short time before becoming an employee until everything is set up. Just know that as such you will be responsible for your taxes which means you will have to pay your own taxes from the salary you receive.

Shirley