FEES: If clients of Free Agent Source pay no fees, how does Free Agent Source get paid?
The billable rate charged to clients includes the cost to operate Free Agent Source. Employees of Free Agent Source are paid from net revenue, the amount remaining after Free Agent Source employer costs and a flat monthly fee to cover overhead costs. When we say clients pay no fees, we mean clients are only billed the agreed hourly rate or flat rate for the job. There are no minimum charges, contract “break fees” or administrative fees.
COMPENSATION: What is a recommended straight percentage by which I can increase compensation so free agents can cover any costs with FAS?
Multiply target gross pay by 1.20. In other words, mark-up by 20%. Examples:
- If target gross pay is $15 per hour, then the billable rate invoiced to your company will be $18 ($15 x 1.20 = $18).
- If target gross pay is $30 per hour, then the billable rate invoiced to your company will be $36 ($30 x 1.20 = $36).
- If target gross pay is $50 per hour, then the billable rate invoiced to your company will be $60 ($50 x 1.20 = $60).
COSTS: Is using FAS really less expensive than being the employer?
Yes, when you look at the time, cost and distraction involved with personnel administration, Free Agent Source is truly less expensive. But more importantly, using FAS allows you to focus on your business. An entrepreneur, business owner, contractor or freelancer cannot do alone with greater efficiency what Free Agent Source does as its core business. We do it not only with greater experience, we have the scale to do it across larger numbers.
But don’t take our word for it. Here’s an exercise that will help you determine if your company is more efficient at personnel administration than we are. Multiply your gross payroll by 20%. Now subtract the following:
- Employer payroll taxes.
- Time and cost to register each new hire and separation with state employment regulators.
- Ensure compliance with all employment regulations.
- Submit reports and pay for workers compensation insurance.
- Time sheet and payroll Processing.
- Time and cost to set-up and operate a group health care plan.
- Time and cost to set-up and operate a 401k plan.
WHAT’S THE CATCH? Can I really run my business on Free Agent Source?
We love that there’s no catch: There’s no minimum # of placements. Recruiting is not locked to us. There’s no exclusivity requirement. There’s simple, transparent pricing. You can even rehire existing or past employees as Free Agents.
TERM LENGTH: How can you offer no minimum terms, when staffing agencies depend on that?
Free Agent Source is not a recruiter. Therefore we have no up-front recruiting costs to recover and we are able to operate on a pay-as-you-go basis. If your company decides to no longer engage contractors through Free Agent Source, then you simply inform your contractors and Free Agent Source of this change. We think this flexibility will encourage clients to come back again and again. As always, it is best to give a minimum of 2 weeks advance notice to contractors and preferably 4 weeks advance notice.
Staffing agencies often combine recruiting services with their on-going personnel management services. Staffing agencies’ cost of recruiting is recovered through a billable rate that is marked-up anywhere from 30% to 100%.
RECRUITING: What if my company wants to use Free Agent Source, but still needs recruiting services?
We recommend engaging independent recruiter whose fees are billed separately from the on-going cost of personnel management. This allows you to clearly separate the cost of recruiting from the cost of ongoing personnel management. If you don’t already have a relationship with an independent recruiter, we would be happy to refer you to some independent recruiters.
CONTRACT WORK: How can a contract professional utilize this service? For instance, a contract IT pro or project manager?
When establishing a contractor relationship directly with a client or a sub-contractor relationship with consulting company or staffing agency, simply designate Free Agent Source as the corporate entity through which you will bill for services. This saves you from maintaining your own corporate entity. Before you can begin billing, you will need to enroll with Free Agent Source, but this is fast and simple.
TEMP TO HIRE: Can we use FAS for temp-to-hire (or trial employment) instead of our permanent solution?
Yes. Short term engagements such as temp-to-hire are a common need which Free Agent Source solves.
LEGAL & LIABILITY: Let’s say there’s a labor or contract dispute. How are legal and liability issues handled? Free Agent Source is the employer. All matters related to employment regulation are the obligation of Free Agent Source and not the client company. Free Agent Source is fully insured. However there are some areas which the client must ensure full compliance, such as maintaining a safe work environment and ensuring sexual harassment and other forms of harassment do not occur. Please consult with a licensed attorney to ensure compliance.
SELF-EMPLOYMENT: If my company contracts with myself, and I become an FAS employee, how does FAS get paid – by me, my company, or out of client invoicing?
- You become an employee of Free Agent Source.
- You tell Free Agent Source the rate per hour to be billed to your company and submit a timesheet for the number of hours worked each period.
- Free Agent Source sends an invoice to your company and your company pays the invoice to Free Agent Source.
- Your pay is processed as an employee of Free Agent Source.
- Your company is still responsible for products and services delivered to customers of your company. The value of your equity in your own company will continue to grow as a result of products and services sold to customers of your company.
- By making yourself an employee of Free Agent Source, your company avoids becoming an employer.
SOLOPRENEURS:Couldn’t I just start an S-Corp and become an employee to achieve W-2 Status?
Yes – but the rest of your answer is coming soon… 
RECRUITERS:Can independent recruiters benefit from partnering with FAS?
Free Agent Source can payroll contractors placed with your clients. You remain in control of your relationships with your clients.
HR PROFESSIONALS:How can corporate HR departments use these tools?
Simply designate Free Agent Source as your supplier for contractor services. By designating Free Agent Source as your supplier for contractor services, you now have a cost efficient way to payroll contractors and still have the flexibility to find talent through any source. You can continue to use in-house recruiters, internal employee referrals, external independent recruiters or any other source for recruiting contract talent.
Examples of how Free Agent Source works for corporate clients:
- Convert established relationships with 1099 contractors into a corp-to-corp arrangement through Free Agent Source.
- Hire-back retired employees through Free Agent Source.
- Use Free Agent Source for temp-to-hire probationary periods.
W-2 STATUS: What are the benefits of W-2 status?
- Income tax is collected each time you are paid through payroll.
- Your W-2 earnings statement makes it easy to file your annual income tax return .
- Home loans, car loans, apartment rentals and other forms of personal credit are all easier to obtain as a W-2 employee because creditors accept pay receipts and the W-2 earning statement as a more reliable validation of your personal income.
- No estimating income tax payments.
- No saving for quarterly and annual income tax.
- No large tax payments.
TEST DRIVE: How can we take FAS for a trial run?
Corporate clients: Contact Free Agent Source for a service agreement. As soon as it is signed, you can begin. The service agreement does not create an obligation for any minimum term of service. You can simply stop using Free Agent Source at any time.
Free Agents (contractors): Enroll as an employee of Free Agent Source. As with any employment relationship, you can terminate your employment at any time, without incurring termination fees.