Questions about using Subs

Discussion in 'Lawn Mowing' started by Wells, Mar 16, 2005.

  1. Wells

    Wells LawnSite Member
    from SLC UT
    Messages: 0

    I'm looking at possibly subing out some of the weekly maintenance work this year that will end up swamping me if I don't sub it out. I'm not ready to hire employees at this point in time so I'm left with the idea of using a sub to do the work.

    I realize that in order for someone to be considered a sub and not an employee they:
    1. cannot be told how to do the job
    2. cannot be told when to do the job
    3. cannot use your equipment
    4. need to carry their own liability insurance

    My question concerns number 3 and 4.

    (3. cannot use your equipment) - Since you cannot let a sub use your equipment can you lease or rent your spare equipment to a sub and be legal? or how about if you sold your equipment to the sub then bought it back at the end of the season?

    (4. need to carry their own liability insurance) - If it's your account and you are the prime on the job, are your subs covered under your policy or do they still need their own liability?
  2. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,087

    See your accountant, reference the IRS website and have a talk with your insurance agent.

    Personally, I think there is a lot of 'grey' in the IRS code, that's basically open for the IRS to interpret however they see fit, depending on the situation. We for instance are contractors for who we work for, yet they often try to tell us how and when to do the work.

    General common sense rules of thumb?

    *Don't try to haul a helper around on a regular basis and consider him a contractor.
    *Don't organize and manage a second crew while trying to treat them as a contractor.
    *Don't hire a contractor and then try to set the time he begins and ends work each day.
    *Don't hire a 'guy' and put him in business as a contractor by allowing him to run your equipment.

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