Hi everyone this should clear up any question of 1099 for "workers" not employees. Employees are just that you withhold taxes and match your portion and send it to the us gov. Sub contractors work with their equipment pay for their own gas and only give you a final invoice for the work and you pay for the one invoice. If you pay your subs weekly say $400.00 a week for 30 weeks and they use your truck, gas and equipment. They will be considered employees. "SEE IRS section 530 A" for more information on this.
Here is the latest news on the miscalculation of workers in the landscaping industry.
One important item The IRS has better ways of finding you than trolling this site.
Unemployment insurance claims, 1099 for subs on your schedule c income tax forms and sales volume over $500,000 a year
Over the last 3 years there has been a ton of new information
The IRS is hunting landscapers specifically for money!
Federal Dept of labor is hunting landscapers specifically for money!
State DOL is hunting landscapers specifically for money!
ICE is now is hunting landscapers specifically for money!
They are suppose to share information with each other but have found out that if one picks off the company and access fines there isn't much left for the others to pick at.
so they really are not telling each other anything anymore. Ice will come in and ask for I 9s and 1099s fine you and leave. They will not deport your workers or even talk to them they just want the money they know you will fire them and if you did it once you will hire someone else again and they will come back in a year or 2 for more money.
It is now a race to see who will fine you first.
Below are some links from the DOL talking to congress when they state over 62% of the landscaping industry pays workers as subcontractors. A study "The Economic Cost of Employee Misclassification in the State Of Illinois" states 28% of landscapers mis classify workers as independent subcontractors.
The state of California says up to 77% of southern california landscape companies are misclassifing workers as subcontractors.
Mr DeCamp from DOL:
I will say this to you in closing my remarks. The image
that is often conjured up of an independent contractor is a Web site designer, you know, someone who designs Web sites and Web pages for a multiplicity of clients and works out of his or her home, and is very much on the fly, on the go; an independent entrepreneur with a laptop and a vision and a business card and a chance to make himself or herself a wealthy person. Long may that person be treated as an independent contractor, because they are.
But there are people who are mowing lawns and driving trucks and working in garment linen factories, working in all different places around this country, who sure do look like employees to me.
Approximately 60 percent of the Wage and Hour Division's enforcement centers on low-wage industries, where violations of the laws we enforce tend to be the most prevalent. The agency devotes more than one-third of its enforcement resources to nine of those industries, including such sectors as janitorial services, construction and landscaping. The agency's experience has been that many of these same low-wage industries tend to have a high incidence of misdesignation of employees as independent contractors.
In California, misclassification is an enormous problem.
But we are an enormous state. The California insurance
commissioner has reported that 30 percent of employers in the state do not carry workers' compensation insurance, and that is one of the sure signs that those employers' workers are being treated as independent contractors.
"Misclassification of workers"
I know most will deny anything like this in our industry but the facts are facts and they are coming your way soon.