You say, " Or maybe that is just how it is here ". That is not how it is anywhere ( any State ) !
Being categorized as a legal subcontractor as defined by the I.R.S. has nothing to do with, " If it falls outside of an area you do not specialize in “, or " If you have sporadic work that would not justify an employee…”. I think many of those in our industry DO mis- categorize their help as subs because they do not want to go through the hassles of correct classification and the added cost (OR) They are misinformed regarding the correct guidelines.
Just because your work is " sporadic " DOES NOT ( in itself ) justify not listing that helper as an employee and paying all associated Fed, State, and Local Payroll Taxes.
Commission works best imo bro, i got a guy right now on 32% productivity shot through the roof! i have a written signed and noterized contract along with no compete, outlining that he is a sub contractor and that he is responsible for himself, has own equipment and has appropriate knowledge to complete jobs with out my supervision. he gets paid for each job that he completes after i get paid for them. he is responsible for own taxes ect. i give him a list every week of jobs to complete and he gets to them on his own schedule that week. i also have another guy im training right now and when hes up to par will get switched to commission. they are responsible for own vehicles and gas, way less headache than an actual employee. its up to them on how much money they make. and i usually tell them a part time job is a good idea so that they can float money until they get paid from me. way less stress guys.
Not true bro, youve been misinformed. any Business can sub contract work. as long as its written in a contract and both parties agree on it, its a sub contract. if its not written in a contract and just verbal agreement than it never happened and then youre out of bounds legally. its just like a news paper route bro, they sub contract you to deliver newspapers.
“The permanency of the relationship is important. An expectation that the relationship will continue indefinitely, rather than for a specific project or period, is generally seen as evidence that the intent was to create an employer-employee relationship.
Services provided which are a key activity of the business. The extent to which services performed by the worker are seen as a key aspect of the regular business of the company.”
Ask the guy who got tagged with a 50k charge from state fund just this year. The main reason is that he has a window cleaning business and he subbed out window cleaning.
Just because you can write it down, doesn’t mean it will pass in the eyes of the irs or your workers compensation company.
“Relationship: The type of relationship depends upon how the worker and business perceive their interaction with one another. This includes:
Written contracts which describe the relationship the parties intend to create. Although a contract stating the worker is an employee or an independent contractor is not sufficient to determine the worker’s status.”
You’re not supposed to sub out the work that is the core of what you do. If you were a “marketing company” however, and did none of the work in house, then you could make the case that they are subs, but they can’t be working for you 30-40 hours a week.
Basically, if you have an employee doing a task you can’t have a sub doing the same thing.
If used sparatically, and the rest of the relationship leaned towards sub contractor, I don’t think there would be an issue.
Huh, using your logic, construction companies can’t have any subs then, legally. I sub with one, who for example, has IN HOUSE employees that do HVAC, but also sub HVAC work.
They are the largest contractor in the area, and are quite a large company. IF what you were saying was true, then they would have already gotten smacked by the IRS. 75 years in business and they are doing fine…
Have treated all workers in similar jobs in the same manner as the workers in question. That is, if you pay two of your painters as employees and four as subcontractors, you won’t meet this test.
I’d love to hear the full story there. I suspect that there was more to it than you are suggesting.
If I get a large job and need some help on it, I know I can legally subcontract another company to help me complete it, so long as I don’t treat them like employees. That means they give me a quote for their portion of the job, they set their own hours, and I don’t tell them how to do their job.
Now if I found a couple of guys who don’t have their own companies, insurance, equipment, etc., then I would have a much harder time trying to pass the IRS sniff test.
Yes, that was two years ago. I’ve learned a lot since then. We are all learning. Unless you have documentation from the irs that says otherwise, everything is completely subjective and up to everyone’s own opinions. What’s so wrong with saying what the law says and bringing in cases that have gone through the process? How am I the bad guy?
Everyone is entitled to do what they feel is right, but the authorities might have a different opinion.
Letting people know about risk should be encouraged. Sorry if this is bad news for you.
I don’t know how to respond here… yes, I have posted documents from the IRS and mentioned the case with @Blue_Ocean_Window_Cl. I don’t see the evidence on the case you’re trying to make.
It would be good for everyone to post actual evidence over opinions and emotions.
I should’ve taken my own advice and muted you but since I didn’t;
nobody is arguing the law, only your take on it.
I ain’t going to explain that because I’d rather not help what may one day be competition so…on mute you go.
