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  1. #1
    Join Date
    Sep 2019
    Posts
    1

    Default Subcontracting

    My question involves independent contractors in the state of: Arizona

    I subcontract out routine office cleaning services to small companies.

    All the companies I sub out to are owner operators and usually have between 2-3 employees other than the owner.

    They provide all the equipment, cleaning supplies, etc. They donít wear any of our companies logos or use any of our materials. They all have their own clients besides the work I give them and they all carry their own insurances/licenses.

    All the subs bill us and charge us on their own payment terms.

    We donít control when they do the cleaning, but after we give them the keys, we do specify the time frame they can go in to the building... for instance we tell them you can go in and get it done any time after they close to before they open.

    We also tell them the days the client is requesting.


    Iím trying my hardest to make sure Iím not miss-classifying. Does everything look in order here? Anything I should do, to make sure Iím nowhere near any grey lines?

  2. #2
    Join Date
    Oct 2006
    Posts
    15,675

    Default Re: Subcontracting

    Quote Quoting AZjansude
    View Post
    My question involves independent contractors in the state of: Arizona

    I subcontract out routine office cleaning services to small companies.

    All the companies I sub out to are owner operators and usually have between 2-3 employees other than the owner.

    They provide all the equipment, cleaning supplies, etc. They don’t wear any of our companies logos or use any of our materials. They all have their own clients besides the work I give them and they all carry their own insurances/licenses.

    All the subs bill us and charge us on their own payment terms.

    We don’t control when they do the cleaning, but after we give them the keys, we do specify the time frame they can go in to the building... for instance we tell them you can go in and get it done any time after they close to before they open.

    We also tell them the days the client is requesting.


    I’m trying my hardest to make sure I’m not miss-classifying. Does everything look in order here? Anything I should do, to make sure I’m nowhere near any grey lines?
    I think you are ok. The facts as you describe them indicates that you are classifying them properly. The fact that they have employees of their own kind of cements things.

  3. #3
    Join Date
    Oct 2016
    Posts
    3,306

    Default Re: Subcontracting

    Do you pay the individuals or the company that pays the individuals?

  4. #4
    Join Date
    Oct 2006
    Posts
    15,675

    Default Re: Subcontracting

    Quote Quoting PayrolGuy
    View Post
    Do you pay the individuals or the company that pays the individuals?
    He said in his first post that his subcontractors were small businesses with 2 or 3 employees, and then further stated that his subcontractors invoice him on their own terms.

  5. #5
    Join Date
    Oct 2016
    Posts
    3,306

    Default Re: Subcontracting

    I know he wrote that but then he went own to ask about a classification question. If he isn't paying the people then their classification isn't his problem.

  6. #6
    Join Date
    Nov 2013
    Posts
    6,472

    Default Re: Subcontracting

    Quote Quoting AZjansude
    View Post
    My question involves independent contractors in the state of: Arizona

    I subcontract out routine office cleaning services to small companies.

    All the companies I sub out to are owner operators and usually have between 2-3 employees other than the owner.

    They provide all the equipment, cleaning supplies, etc. They donít wear any of our companies logos or use any of our materials. They all have their own clients besides the work I give them and they all carry their own insurances/licenses.

    All the subs bill us and charge us on their own payment terms.

    We donít control when they do the cleaning, but after we give them the keys, we do specify the time frame they can go in to the building... for instance we tell them you can go in and get it done any time after they close to before they open.

    We also tell them the days the client is requesting.


    Iím trying my hardest to make sure Iím not miss-classifying. Does everything look in order here? Anything I should do, to make sure Iím nowhere near any grey lines?
    I would agree with ll that it appears that these businesses are independent contractors.

    Arizona use the right-to-control test to determine if the person or company is an IC or an employee. The right-to-control test is mush the same as the ABC tests of other states and the IRS Right-to-control test.

    I think you are OK.

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