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Discussion Starter #1
Hope some of you older experienced people on here can add some good info for me.

Just as some back info I was doing custom hardwood floors for nearly 3 yrs. for 2 yrs i was making $22/hr as an emplyee. at a later point they forced us all to become 1099 subcontractors and our pay increased to 33/hr as a base pay for patch work repairs etc, but we were payed by the job/square footage.

now up to current, the economy has forced me to go back to doing landscaping which i started learning when i was out of highscool. ( paver patios, retaining walls etc.). The guy i started working for apparently 1099's all his employees and still only pays them 10-12/hr based on experience. I know for a fact that there are dozens of landscaping companies around that pay similar or better wages while being an actual employee with workers comp coverage social security etc. Is it absolutely rediculous for this guy to be paying people those wages and 1099'ing them?

I've also heard it may be illegal to pay that low of an hrly wage to a 1099 contractor because after paying taxes, SS, etc its below minimum wage?
 

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when i was younger i worked for a fab shop, got a 1099 i made 7500 and owed 1500 in taxes!!!!!!! Get some good lube cause ur about to get fucked!
 

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If you're a sub-contractor, you're working for yourself, not an employee. So they can pay you what they want... It's a loop hole.

Make sure to set 30% aside for taxes of whatever you make. You'll probably want to pay quarterly taxes to take the sting out. You are paying for your own Social Security and unemployment benefits. It's like owning your own company and invoicing your boss.

The good thing about doing this, is that you can write off quite a bit on your taxes. Any personal vehicle mileage (you need to keep a log) to/from your work after you arrive there can be written off.

Unfortunately, it's an employers market, as we've all found out.
 

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Discussion Starter #6
Ok, so shouldnt the hourly wage be signifigantly higher for a 1099 sub, than a regular employee? IE this dude is paying me 11/hr as a 1099 when i could go make that as a regular employee elsewhere..
 

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1st of all, it's take it or leave it on the pay. As long as they are above minimum wage,
they can do anything they want. As for giving a 1099, unless it's totally different in my business.
I can not give anyone a 1099 that is not set up as a business.
If you don't set yourself up as a business of some kind, he is going to get busted.
Like I said, at least the guys in my business that tried that all got caught,
and had to pay all the taxes and withholdings when they did get caught.
My guys are all subs, they get a 1099, but they must have liability insurance,
they must have a business set up, even if it's just a dba.

.
 

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Discussion Starter #8
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1st of all, it's take it or leave it on the pay. As long as they are above minimum wage,
they can do anything they want. As for giving a 1099, unless it's totally different in my business.
I can not give anyone a 1099 that is not set up as a business.
If you don't set yourself up as a business of some kind, he is going to get busted.
Like I said, at least the guys in my business that tried that all got caught,
and had to pay all the taxes and withholdings when they did get caught.
My guys are all subs, they get a 1099, but they must have liability insurance,
they must have a business set up, even if it's just a dba.

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So you're saying a unanimous call to the IRS at the end of the tax year could get me out of paying 1099 taxes. as i never signed a single document, aquirred any liabilty insurance, no business lisc or anything. All he asked me for was a DL# and SS# for 1099 purposes
 

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I think some states have laws so that company don't 1099 workers to avoid Work Comp and unemployment.
If you work more than a certain amount of hours regularly for someone they consider you a employee in some states.
 

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Discussion Starter #10
At my flooring job, when becoming a 1099 sub I was required to sit down and fill out tax forms, sign some contracts/ paperwork. and show proof of 1 million dollar liability insurance.

at this job all he asked for was a liscense # and SS# for 1099. He doesnt pay anyone overtime, pays 10-11/hr and has us working 45-60hrs a week. I started this thread because I fell like he is trying to take advantage of his workers and make money off them and not have to pay proper insurance, workers comp, and unemployment. I think hes been getting away with it because his whole crew is composed of kids age 20-25
 

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I went thru this a few years ago while driving wrecker after hours. We were paid on commision and given a 1099. Found out later that as long as we were driving the companys trucks they could not 1099 us.
 

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There are a number of "tests" that the IRS uses to determine whether a person is a legitimate independent contractor eligible for 1099 status, or if they're really an employee. In this particular case, if you are a real IC, you provide your own tools and set your own working hours. If the person paying you tells you when you have to work, or supplies your tools, then you're an employee by the IRS definition.

This may help clear it up: http://www.irs.gov/pub/irs-pdf/p1779.pdf
 

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Discussion Starter #13
There are a number of "tests" that the IRS uses to determine whether a person is a legitimate independent contractor eligible for 1099 status, or if they're really an employee. In this particular case, if you are a real IC, you provide your own tools and set your own working hours. If the person paying you tells you when you have to work, or supplies your tools, then you're an employee by the IRS definition.

This may help clear it up: http://www.irs.gov/pub/irs-pdf/p1779.pdf
WOW that is great info. I show up to his shop every day at his set start time, use all of his tools, and drive his company trucks to the jobs every day and he pays for gas, supplies, everything. He tells us the hours that we HAVE to work. We were behind from the rain this week and he kept us working a 13 hr day on a friday i clocked out at 8:49 pm
 

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WOW that is great info. I show up to his shop every day at his set start time, use all of his tools, and drive his company trucks to the jobs every day and he pays for gas, supplies, everything. He tells us the hours that we HAVE to work. We were behind from the rain this week and he kept us working a 13 hr day on a friday i clocked out at 8:49 pm

You are definately not a subcontractor(no 1099). You should get this straightened out soon.
 

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Business owners now like to call you a Independent Contractor. 99% of the time the paperwork you fill out isnt worth a plug nickel. At one time in Cal. if you were a IC and didnt pay taxes the state went after the person that hired you as a IC and made them pay. Also if you pay into SS and are working as a IC the business you are working for as to match atleast 50% of what you put in. There is a fine line between being a IC and a employee. Most of the time you are a employee when or if there is a problem and you go before a court of law. As an IC you are your own business. Lets say you go to work for someone and they make you wear a uniform or shirt with their company name on it. You are considered a employee by law. Alot of businesses are doing this so they wont have top own vehicles,maintain them and pay ins. on them too. This type of thing became popular when a courtesy driver for a car dealership was taking a customer home. The person was involved in a accident. Killed the passenger in the van he was driving and the driver of the other vehicle. The car dealership was sued for millions upon millions! I dont believe the minimum wage thing applys. You are working for yourself in your own business and its not someones elses problem you dont make over the minimum. I know this would be more applicable say if you were using your personal vehicle for work. If after gas,maintenance and ins you dont make over minimum wage you shouldnt do it. Most generally you do make more than the minimum....Best to have some good write offs!
 

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There are a number of "tests" that the IRS uses to determine whether a person is a legitimate independent contractor eligible for 1099 status, or if they're really an employee. In this particular case, if you are a real IC, you provide your own tools and set your own working hours. If the person paying you tells you when you have to work, or supplies your tools, then you're an employee by the IRS definition.

This may help clear it up: http://www.irs.gov/pub/irs-pdf/p1779.pdf
And 90% of the truck drivers I know that drive for smaller independent companies, say 10 units or less, get 1099'd. They are told when and where to work, they don't own the trucks and the only "tools' the bring is a drivers license and a lunch pail.
 

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WOW that is great info. I show up to his shop every day at his set start time, use all of his tools, and drive his company trucks to the jobs every day and he pays for gas, supplies, everything. He tells us the hours that we HAVE to work. We were behind from the rain this week and he kept us working a 13 hr day on a friday i clocked out at 8:49 pm
Be careful, if you wreck HIS truck, it goes on YOUR insurance since you are not a direct employee, you are not covered by his insurance.
 

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Discussion Starter #19
So whats the best route to take with this? keep getting payed a straight check each week with no taxes taken out and at the end of the year throw all these IRS docs out on the table and I wont have to pay shit. Or present him with this info now and tell him he needs to start taking taxes out himself etc. because i am an employee?
 

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Blown, I have to say those guys are employees! I know guys here that are doing IC work with their own trucks. One guy I know was made to put the companys name on his truck for the obvious reason. He got a hefty fine by the DOT. The truck is in his business name and not the people he is working it for. Courier companies are real good for that BS.
 
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