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  1. #1

    Default Re: Unsure Of How To Pay My Employees Legally

    OMG, you spoke nothing but the truth! I am so sorry about your previous situation-- I know it just had to be infuriating and frustrating at the same time.

    The Act defines the employer-employee relationshisp (basically, I think) as someone who is dependent upon the business which s/he serves. Since my staff would have other full time jobs, and again, this would not be full time work (at the most, they could rack up 60 hours per year for one contract), I am wondering if I am relieved of that relationship and able to go IC.

    But considering that their services would be integral (as they are handling clients), so to speak, I think that brings me back to employee (by virtue of the law)

  2. #2
    Join Date
    Mar 2008
    Posts
    1,995

    Default Re: Unsure Of How To Pay My Employees Legally

    One other thing if you plan to have employees is to be familiar with the "workman's comp" laws in your state. I have a business where I had employees as well as utlilizing the services of many many IC's supplementing the work of employees.

    In my state, NY, where the owner of a business is the only worker, YOU ARE EXEMPT from workman's comp. But so long as you have ONE employee, you have to go out and get a WC policy. If your assistant got into an accident as an employee, driving to see a wedding say, not only would YOU be responsible for paying hospital bills (covered under WC) for his or her injuries, but everyone else he or she hits.

    It gets better.

    When I started using IC's, I didn't know the intricacies of WC, and under my workman's comp policy, when they audit me, I'm reponsible for, and get CHARGED for IC's that does not have WC, or is NOT exempt from it. Here in NY State, I can hire an IC, but in order for him to be exempt from WC (so I wont get charged) , he has to set himself up as a business, could even be a proprietorshhip, but doing so would get him a WC exemption if he is the only employee, and that gets you off the hook. The first year I had my WC audit, I had to call around my IC's and get their WC policy numbers. I was surprised (I shouldn't be, but I was stupid) many didn't have WC policies, and I was CHARGED for those that didn't carry WC. In other words, I'm paying for THEIR WC.

    If you are not aware of any of this, you'll get yourself in trouble coming and going.

    Now, if it is the SECOND job for these people, it is EVEN more important you set things up right. I don't think their PRIMARY employer would appreciate their employees getting hurt on their SECOND job, collecting disability benefits, medical, and so forth on the first employer, and you get off scott free. No way.

  3. #3
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Unsure Of How To Pay My Employees Legally

    before making the decision as to IC or employee, you first must determine if in fact they would be classified as employees per the rles determined by the IRS

    If they are defined as employees by the IRS, you have no choice but to consider them as employees and treat them as such.

    he federal DOL also has some input as the FLSA plays heavily on employee situations and failure to treat an employee as an employee can get you in a heap o' trouble.

    the fact the have other jobs does not make any difference as to IC/employee status. Anybody can have multiple jobs, employee or not.

    here is a link or two that may help you define your position. I would tend to think you have an employee situation as you do seem to have too much control over them but this is often a question not easily answered.

    http://www.irs.gov/businesses/small/...=99921,00.html

    http://www.gcfa.org/PDFs/TaxPacket20...Contractor.pdf

    I do not know ifyou can file a SS-8 with the IRS as a proactive measure but if you can, I would suggest doing so. That form simply is asking them to make the determination. Since they will ultimately make the determination should there be ever be any question anyway, it would seem prudent to ask them for their determination before you have already hopped in the pot and cooked your own goose.

    Have you ever thought of hiring through temp agencies such as Manpower, Kelly Services, or any others that may be available in your area.

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