Contractor or employee?
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Contractor or employee? (by JamesD [CO]) Jan 6, 2009 2:07 PM
       Contractor or employee? (by Jason PA [PA]) Jan 6, 2009 2:27 PM
       Contractor or employee? (by Susan [CO]) Jan 6, 2009 2:39 PM
       Contractor or employee? (by Steve [MA]) Jan 6, 2009 2:51 PM
       Contractor or employee? (by Bill P [TX]) Jan 6, 2009 4:33 PM
       Contractor or employee? (by Smokowna [MD]) Jan 6, 2009 5:09 PM
       Contractor or employee? (by BRAD_IN [IN]) Jan 6, 2009 5:14 PM
       Contractor or employee? (by John [NJ]) Jan 6, 2009 7:49 PM
       Contractor or employee? (by Bill P [TX]) Jan 7, 2009 2:38 PM

Contractor or employee? (by JamesD [CO]) Posted on: Jan 6, 2009 2:07 PM

Recently got an offer accepted on a new property. It needs to be painted and some other small cleanup. Friend of mine accross the street lost a job and could use a few bucks, so I'm thinking about letting him do the painting so he can earn few bucks. Would like to claim the expense (around $250) but worried that he'll be considered my employee since he's entirely under my direction in this case... Hoping to avoid employee status if possible - what's the best way to do it?


Contractor or employee? (by Jason PA [PA]) Posted on: Jan 6, 2009 2:27 PM

Have him sign an independant subcontractor agreement.

Contractor or employee? (by Susan [CO]) Posted on: Jan 6, 2009 2:39 PM

Does he have a business license? Insurance with a d/b/a? Workers comp? Does he do the same type of work for others? Does he set his own hours? If not, he is not technically a subcontractor.

That said, you are taking the risk in the event of an injury. If the amount you pay him is over $600, you should be issuing a 1099 at the end of the year.

People hire cheap handymen all the time just as you are proposing to do, just know that by doing so you are taking a risk that the IRS or insurance company might disagree that he is a subcontractor and if so, you end up paying payroll taxes or having a workers comp claim on your insurance. --209.181.xx.xx

Contractor or employee? (by Steve [MA]) Posted on: Jan 6, 2009 2:51 PM

The only way to limit your liability would be to do one of these;

1 get your own insurance, etc & hire him as an employee

2. require him to be a fully insured legitimate sub

3. hire him thru a temp agency

Otherwise you are exposing yourself to a lot of potentially expensive issues.

Contractor or employee? (by Bill P [TX]) Posted on: Jan 6, 2009 4:33 PM

Do not claim him as an employee. The process and paperwork involved in payroll is expensive. You are so much better off avoiding your friend and hire someone else.

You could also hire him thru an agency or another contractor with insurance.

I flip houses too. The process of buying, hiring contractors to fix and then selling property I have never lived in qualifies me for some stupid reason as a contractor. Including the need for general liab ins. Beware of falling into my trap too.

Contractor or employee? (by Smokowna [MD]) Posted on: Jan 6, 2009 5:09 PM

Two hundred and fifty is a small enough number that I would not be overly concerned. You would simply make a notation and not have a valid receipt. No auditor would question a few hundred dollars at turnover.

If the friend does a poor job, you will need to hire someone else to go over the work. In both cases I would worry more about their being hurt than the receipts.

I bet, by the time you read this, half of the work will already be completed. That is how thousands of landlords operate every day.

No ladders, no roofing, no sharp blades...should be no problem.

Contractor or employee? (by BRAD_IN [IN]) Posted on: Jan 6, 2009 5:14 PM

-#1 Don't hire friends. "Joe, I'd rather be your friend than your boss". Each time I broke this rule I could kick myself. Money and deadlines change relationships. I cannot demand my friend get the job done or improve his quality.

When you find a non-friend to work:

-Independent Contractor agreement.

-pay to a business name: Joe Smith DBA Joe's Painting

-pay by check, NEVER NEVER NEVER cash.

-DO NOT let him use your ladder. Better to pay him more to buy or rent his own ladder. The owner of the ladder will be sued if there is a fall. A painter has tools, ladders - employees use the boss's ladder.

-have a written quote, with a deadline penalty, and pay that amount, only when complete.

Contractor or employee? (by John [NJ]) Posted on: Jan 6, 2009 7:49 PM

What is he painting? Rooms? Just pay the guy for his time. Keep it simple. He should only be there a few days. Again, keep it simple. In my area friends help friends as we all have our specialties and basically barter our jobs. NEVER had a problem as long as you closely monitor the work and know who is working for you.


New Jersey

Contractor or employee? (by Bill P [TX]) Posted on: Jan 7, 2009 2:38 PM

Two comments from posts so far...

BRAD_IN [IN] - He's so right! If you provide him any tools (ladder, screwdriver, etc) you are his employer. That's the law. May be a TX law or IRS law. Don't know, don't care.

Also, someone mentioned an independent subcontractor agreement. That's good, but there may also be a state form. In TX it's a Waiver of Workman's Comp form put out by the state. You have to fill it out before the job or early into it and fax it to the state.

Why not not pay him. Take him out for a beer after the job to show appreciation. It's not like he can warranty the work anyway so why hire him? It's only a few hundred dollars and a one time deal right? If he needs money, give it to him. Tying the two together just complicates your life.

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