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Discussion in 'Business Operations' started by ron monteith, Nov 2, 2003.
For installations I pay my subs per shrub installed,
sorry, I pay them per shrub installed, per yards of bark/stone installed, how many square foot installed etc. They get paid by how much work they do. The only thing I pay them hourly on is pruning. All of my subs do work on their own though. I make sure they do. My accountant always told me to make sure they at least do like 5 side jobs per year, to make it look like they are a businesss. They all own their own tools, except for the big machinery like skids, and tractors. They use mine. Make sure you let you liability insurance know you use subs, and they use your equipment if they do. Thats one thing they are free to work for anybody else they please. This is where sometimes there can be problems, if I think they are "stealing" my work. We have a good relationship right now though. They know not to bight the hand that feeds them so da speak.
Do things however you want. I am just telling you that what you're describing isn't legal. If you landed a landscaping installation and you are paying the guys to install the plants under the guise that they are a sub-contractor then you're breaking the law and could face some severe penalties.
Who provides the shovels? Who tells them where exactly each plant goes? Who instructs them on how to plant them properly? Who determines when they are to show up at the job site? Who controls the work orders? Who buys the plants to be installed?
If the answer to most of the above questions is YOU then you're breaking the intent of the sub-contractor laws as defined by the IRS in the 20 factors I posted before.
How about setting the company up like, lets say Re-Max Realty. They sell franchises. They put you in business, will supply you an office. You can not work for anyone else but them. They treat you like an employee but they are really not an employee.
How about most home builders, most have all subs. but if they are big enough, the subs only work for the one home builder. This looks like the same deal to me.
All I do is buy the plants and drop them off on the job. I give them my print and they lay it out themselves and go to work. They all have their own equipment. I dont instruct them on how to plant properly, they either do a good job or they dont get paid, they know this. As far as when to show up to the job I dont tell them that either. They have there own hours. I just tell them when it needs to be done by. So now what I am doing actually is not illegal. You would have read that they have their own shovels if you would have read my entire last post. Keep your day job.
Ok. Well what you're describing now isn't the way it came off before when I read it. And I am just trying to spell out for guys who are thinking of hiring what amounts to be actual employees that simply by paying them "by-the-plant" doesn't make them independent contractors. There are a whole host of factors that need to be satisfied in order for the independent contractor test to be satisfied.
Maybe what you're doing is legal. I don't have enough information to tell. But I do know that the way most guys try to do it is NOT legal. And that's where my warnings come from.
Thanks for the response. Yes, I am looking at all options to make it work for the Government and myself. I want to pay what is owed no more, no less.