10-99

Discussion in 'Business Operations' started by Clapper&Company, Feb 22, 2005.

  1. Clapper&Company

    Clapper&Company LawnSite Bronze Member
    from NE Ohio
    Posts: 1,291

    Dose any of you guys, 10-99 your employees? It would save you money in the long run. I just wanted to know how many guys do this. What are the pros & Cons?
     
  2. your right it will save you a lot of money , TILL they do an audit and bye bye money/
     
  3. dsaldivar

    dsaldivar LawnSite Member
    Posts: 51

    Yeah, I've heard the law is real clear on this. I'm sure others of tried to get around the law, including me.

    I plan on talking with a lawyer on this aspect of using contracted labor. I know one of the tests requirements in determining between employee or contractor status is "using their own tools". But I was going to approach a lawyer about the possiblility of setting up a tool lease agreement to satisfy this requirement.

    In other words, in the agreement I would state a price for leasing various pieces of equipment and tools. This of course would be added to the laborer's rate of pay so that in essence he is not paying anything and I'm not collecting anything.

    Oooh I know this is going to open a can of worms.

    Just thinking outside the box.

    Danny
     
  4. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Posts: 489

    Illegal to 1099 and employee for the work that employee is employed to do.
     
  5. Carolina Cutter

    Carolina Cutter LawnSite Senior Member
    Posts: 987

    1099 is for NON-EMPLOYEE COMPENSATION!!!!!! You cannot do this for an employee of yours only a subcontractor.
     
  6. dsaldivar

    dsaldivar LawnSite Member
    Posts: 51

    Ok let me clarify..

    I'm aware that a 1099 is for a Non-employee. The idea is get people to become 1099 workers not employees. Many in this industry try to do just this for purposes of not being responsible to pay employer taxes. But there are criteria and requirements in the law statute that must be met in order to determine whether a person can be deemed with a status of a 1099 contractor. One of those requirements that's hard to meet with most LCOs is the requirement for the 1099 to have their own tools. This is the requirement I was addressing in my earlier comments.
    Make sense?
    Thanks,
    Danny
     
  7. SodKing

    SodKing LawnSite Bronze Member
    Posts: 1,648


    Lets see these 8$ per hour people you want to hire should bring their own tools??? like the lawnmower, rakes, shovels???

    This horse has been beaten dead. Do a search and find the 15,000 reasons why you can't do this.
     
  8. dsaldivar

    dsaldivar LawnSite Member
    Posts: 51

    Hi SodKing,
    Need to beat the dead horse just one last time.

    I realize this has been discussed. Believe me I've done the research. But humor me if you will. I like to continue to think outside the box.

    As I stated, the idea would be NOT for the employees to actually bring their own tools but for them to LEASE them from me. Not in realistic terms, because the lease rates for the tools would actually be added on top of their regular pay rate and then paid back to me. Example, lets say I pay the person 8/hr but in the lease agreement they need to pay me .10/hr to use a rake. Then on paper I would pay them 8.10/Hr but the .10/Hr would actually be paid back to me for using my tools.

    Make sense? Well anyway, I agree. No longer can beat the dead horse.
    Thanks,
    Danny
     
  9. John from OH

    John from OH LawnSite Member
    Posts: 144

    Danny,

    I like to think out of the box also, but there are so many ways that this can/will go bad for you. I personally don't see what the big deal is about paying payroll taxes. They are a fact of life in the business world. Figure out what they will cost you, figure out how much you will need to cover them, and add it in your prices. Your time will probably be better spent growing your business rather than trying to figure out how to get around a legitimate expense. How many prospective employees are going to be tripping over each other to come work for you, pay the payroll taxes out of what you are paying them, and then pay for the use of your tools to boot? Once one of these employees figures out they do not have a very good deal, or one of them gets hurt and doesn't have workers comp, you'll probably be on the very expensive end of a deal gone bad. Offer a legimate wage, and go out and sell your services, and prosper.
     
  10. Clapper&Company

    Clapper&Company LawnSite Bronze Member
    from NE Ohio
    Posts: 1,291

    what if they bring a rake to work? Then there bringing there own tools, right?
     

Share This Page