Employee's - contract labor questions?

[meets1]

Have had employees for a long time. Talking with a building contractor who has 6 fulltime guys year around and 2-3 extra during the summer was telling me I am foolish to have all these guys on payroll.

He told to switch them over to contract labor. Cheaper, reduces the liability if they get hurt etc.

I am digging here myself for answers - anyone do this, know of this etc.

[Kickin Your Grass]

It's only cheaper untill you get caught doing it then it's really expensive.
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[meets1]

Why gettting caught? Who is watching that type of thing? OSHA, IRS, Insurance?

[LoweJ82]

Labor board ppl or who ever fights for employee rights, not very friendly ppl at all.

From what I understand if your paying someone by the hour, even as a sub with a pre set price per hour even giving a 1099 at end of the year that its not considered sub contract work and they can still claim un employment, then you havent collected any tax, ssi or paid anything in on the unemployement benifits and when they claim..................... Sh$$ts gonna hit the fan and splatter all over the place.

I could be wrong but thats the way I remember reading it and from what Ive heard, never had any dealings like this and dont wanna.

My younger cousin came to me looking for advice on a "Sub Contractors" position that was available, the GC wanted to pay $10.00 per hr and hold out 15% for taxes & so on, plus give him a 1099 at end of the year and on top of that b/s wanted him to carry General Liability, Told him not to allow anything to be with held if he was gonna get a 1099 and that he would need to get the GL INS and a better hour rate of atleast
$30-$40 pending what it was he was gonna be doing.

[bohiaa]

its very hard in this business to make an employee a Sub.

a company in my area was doing just this. and now it looks like he will loose everything he owns.

they useually get caught by the insurance.

it's 30%, plus all the back ss/unemployment.fica.

trust me, if you dont know what your doing, your doing it the right way.

Keep them as employees

[meets1]

I here ya there. I think I will do what I have done!
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[Fvstringpicker]

Wise choice Meets. The IRS is watching this sort of thing. Among many other ways of getting nailed is to have one employee ( of some other person) report it. How easy is that to happen? When the employee gets PO'd because they have to write a check for a bunch of taxes, including self employment tax, when nothing is withheld.