MSPROS Announces Flat-Rate Employer of Record Service for Independent Microsoft-focused Consultants and Their Clients

MSPROS is now offering a flat-rate Employer of Record service to assist independent Microsoft-focused consultants and their clients avoid the potential liabilities associated with misclassified workers by the IRS.

HOUSTON, Texas, USA - June 1, 2001 - MSPROS, LLC, a global network of independent Microsoft-focused professionals and solution providers, today announced the availability of its flat-rate Employer of Record service for independent consultants and their clients. The service is being offered to address the growing concern by clients of the IRS scrutinizing their use of 1099 contractors and single-employee corporations.

Given current market conditions, many companies are looking for a way to use independent contractors to minimize costs and reduce employee headcount, while many recently laid-off workers are trying to get the compensation they deserve for the contract work they are now doing," said Nivine Zakhari, MSPROS President & Founder.

However, there is concern about the potential liability of misclassifying contractors the IRS would consider to be employees, possibly resulting in fines being levied against the client or contractor or both. Our Employer of Record service helps mitigate that risk for all parties involved by allowing the client-contractor relationship to continue, but have the contractor classified as an MSPROS W-2 employee for tax-withholding purposes. This not only ensures that the appropriate local, state, and federal taxes are being withheld from the contractors compensation, but also provides them discounted benefits and business support services they may not otherwise have access to as an independent contractor."

Having been an independent consultant for several years herself, Zakhari said she had finally seen enough of the temporary staffing and consulting firms gouging contract workers bill rates to essentially provide tax-withholding services.
Basically, the government wants every wage earner to be someone elses W-2 employee to ensure the appropriate amount of taxes are being withheld," Zakhari said. The temporary staffing industry, particularly for high-tech workers, grew out of the need for client companies to make sure their contractors were complying with the applicable tax laws while still allowing them to use the temporary" employees when needed."

Zakhari points out the cost of providing Employer of Record service is miniscule compared to the outrageous fees" many staffing companies charge. The staffing companies, of course, took advantage of the situation by hiding the rates from both parties - negotiating the highest rate possible with the client, paying the lowest rate possible to the worker, and just pocketing the difference. MSPROS insists on full disclosure of the billing and pay rates so the clients and workers best interests are properly served."

Zakhari expects to have many consultants and clients convert workers to their flat-rate Employer of Record service simply for the cost-savings versus similar service providers. The administrative burden of handling a W-2 employee is the same whether a contractor bills $20 an hour or $200. Other firms, whose fees are based on a percentage of the billing rate, are essentially penalizing the high-end consultants and their clients. Why should the $200 contractor or their client have to pay 10 times more for the same service a $20 contractor requires?

Given the recent lay-offs, Zakhari expects more workers will want to operate as independent consultants instead of taking traditional, permanent positions with a single employer. Permanent is an inaccurate description of the employment arrangement many people have with their companies. Given the record number of lay-offs weve seen recently, I dont think its reasonable for anyone to assume their 'permanent position will be there in the future. For consultants who have the skills, determination, and resources to work as independent contractors, our service will help them maintain the freedom & independence they value the most while relieving their clients and themselves of the administrative burden related to hiring employees and running a business."

About MSPROS: MSPROS, LLC, headquartered in Houston, Texas, is a global network of independent Microsoft-focused consultants and solution providers. The company offers technology consulting and custom application development primarily based on the Microsoft platform. They match pre-screened independent consultants with clients based on vertical market or horizontal areas of expertise. More information is available at the companys website http://www.mspros.com.

MSPROS and the MSPROS logo are trademarks of MSPROS, LLC, pending registration with the United States Patent & Trademark Office. Product names and company names referenced herein may be the trademarks or registered trademarks of their respective owners.
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