1099 empoyees--legal

Discussion in 'Business Operations' started by hustlers, Apr 20, 2003.

  1. Got Grass?

    Got Grass? LawnSite Senior Member
    Posts: 363

    Duh forgot about that (MAJOR) part.... lol
  2. I do a lot of subcontracted landscape installs, I have been known to barrow their truck and skid steer to do a paticular job here n there. But this does not affect my status with the IRS.

    But yes, A sub can be supplied materials and specs, but the sub supplies the rest.
  3. Got Grass?

    Got Grass? LawnSite Senior Member
    Posts: 363

    Oh, and a sub can do any additional work they choose. They are not exclusive to you. Just like how you can take on any customer you want or drop any you don't want.
    Al tho it is a good idea to have a non compete clause, so they can't set up a deal to undercut you, remove you from being the middle man & take your customers away.
  4. Turf Technologies

    Turf Technologies LawnSite Senior Member
    from Florida
    Posts: 590

    If you set the work hours and they are in your truck there an employee.
  5. hustlers

    hustlers LawnSite Senior Member
    from MN
    Posts: 257

    I have a couple of other friends who work for contractors
    with same deal. They have to pay all their own taxes and
    self-employment even though they are employees.

    one of them was washing windows as an employee and
    he scratched a window and it had to be replaced.

    The contractor tried to make him pay 7500 for the replacement and witheld all his pay, he turned them in to the dep. of labor and is still waiting to see what happens.
    Im glad Im not taking stupid chance!!!!!
  6. Mr.Stripey Lawn Care

    Mr.Stripey Lawn Care LawnSite Member
    Posts: 64

    In Ohio I am a house framer, and all though I don't know much about the workmans compensation(except that it saved my butt when a nail went through my hand), here you can pay your employess as sub contractors, that is what the 1099 enables. The benefits for the owner is that he gets to keep more money, pays no employee taxes...The benifits for the "sub-sub-contractor", what we call them, is that they can write off vehicles, mileage, fuel, etc...but the most major drawback is, What average Joe takes his weekly checks and saves enough money to pay the IRS at the end of the year? Not too many. They do have to pay taxes, it just isn't taken from them weekly. Before I started for my boss, he paid all his people that way, as sub contractors, but most of them didn't save money for the 8,000 dollars or whatever it might have been, and got bit in the rear by the fabulous Uncle Sam.

    100% Legal, at least here...
  7. bruces

    bruces LawnSite Senior Member
    Posts: 648

    No, not legal just because people do it doesn't make it right.

    These people are 99 times out of 100 employees. The fact that the employer is treating them as sub contractors doesn't make it legal.
  8. Rex Mann

    Rex Mann LawnSite Senior Member
    Posts: 621

    Mr. Stripey,

    I started my business in Ohio and, had it for 9 years there. Ohio or any other state does not dictate who and what a sub is. The IRS does that.

    Guys just starting out do that to save payroll taxes, workers comp., higher insurance rates and unemployment taxes. I pay about 60K just for WC per year. I could put an extra 100K in my pocket if I 1099'd everyone.


    Rex Mann
  9. Internal Revenue Service. It is the same for all 50 states.

    I missed that Rex

    I had a guy who I interveiw wanting me to 1099 him, he wanted this to escape wage garnishment, I didn't hire him because he could not be considered as a sub contractor. I would love to do this, but it's not possable.
  10. Mr.Stripey Lawn Care

    Mr.Stripey Lawn Care LawnSite Member
    Posts: 64

    First I would like to apologize. I am not very well educated on the subject, and should not be speaking (posting) on the matter. But in the framing world, my boss told us that he was considering it, so that he could bounce back from our down time. Builders couldn't poor concrete, so we had nothing to put any houses on, and in turn were laid off for 2 months. He is very competent, and am almost certain that he wouldn't do anything illegal. I am not a company owner with employees though, so I don't know.

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