"1099 employees" Legal or Illegal?

[zturncutter]

Originally Posted by tjlco

No no no and more no. Unless they have their own equipment & insurance & trucks ect....and subcontract work from you. Sure you can do it, I know guys that have been for a couple years. I'd hate to see the IRS penalties when they get caught

I agree on the legality issue and the liability issue, but if someone like my wife is an employee under the law and files for unemployment and that doesn't throw up a red flag what the H_ll does it take.

[larryinalabama]

I once got a 5$ bill for working for someone else...........just saying.

[Landscape Poet]

I simply do not understand how this is legally possible. I hear a million guys talk about it and how paying cash to you employee is great...but my accountant says it is not legal of course and not as profitable as doing it the correct way.

[cgaengineer]

Originally Posted by Landscape Poet

I simply do not understand how this is legally possible. I hear a million guys talk about it and how paying cash to you employee is great...but my accountant says it is not legal of course and not as profitable as doing it the correct way.

It's all fine and dandy until that 1099 "employee" hurts someone or gets hurt himself.
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[ztman]

Key is (1099 vs employee) do you exercise control over the individual as to how and when they perform the service. Test is dominion and control. Doesnt matter what you call them on the books, its what they are actually doing and if you are telling them when and how to do it. Many try to get around the employee designation, but if they are really and employee, dont try to misclassify them.

[LGL]

Thats pretty much what my research has been showing, thanks for the comments.

[LGL]

Originally Posted by larryinalabama

I once got a 5$ bill for working for someone else...........just saying.

What?????????????????

[fl-landscapes]

Originally Posted by zturncutter

This is what my CPA has always told me, but I have to say my wife worked for a real estate mag for over 20 years in the office handling calls and in the field taking photos using his equipment on his schedule and got a 1099 every year. When the economy crapped out she was laid off, filed for unemployment and was told no go, she was a subcontractor. My CPA has no answer for this.

He was probably breaking the law. Even a true 1099 sub contractor must have workers comp otherwise YOU are responsible for the fine.

[Duekster]

Originally Posted by fl-landscapes

He was probably breaking the law. Even a true 1099 sub contractor must have workers comp otherwise YOU are responsible for the fine.

In Texas you can get a waiver for WC from a sub contractor.
On commercial jobs a smart commercial owner will not allow that by contract.

My WC Carrier audits me and ask for copies of their coverage or they just increase my rates.

[jvanvliet]

Originally Posted by cgaengineer

It's all fine and dandy until that 1099 "employee" hurts someone or gets hurt himself.
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We kill and eat our wounded...

You can sub-contract out your work, you can even lease your equipment. You can spell out in the contract the scope of the work, timeliness and completion dates. Those are not unusual provision's in contracts and doesn't necessarily make you the employer.

But if they get in your vehicles everyday and go to and from the job site everyday, if the equipment stays on your trailer... etc. etc. he's got flat feet, feathers and a yellow bill; he's a duck; or an employee.

If everyone in the industry were forced to comply with labor laws, 80% of these jerks would disappear.