Re: [apple-crop] Employee vs. Contract labor
Thanks Brian, It can be a bit confusing in determining the definition of a contractor. In Googling State information, I came across 20 different questions/guidelines to try to determine whether someone is classified as an employee or contractor. What makes it more confusing is that some producers hire crews to thin their peaches and classify them as contractors. Either way, I've decided to hire the teens as employees, not contractors, for the temporary help I need, based on all the good advice on this listserv. I already fill out a 943 and W2 for my son, who helps me. Mark Angermayer Tubby Fruits Peach Orchard Bucyrus KS On 4/11/15, Brian Heatherington beechcreekfa...@earthlink.net wrote: Mark, From the perspective of the IRS and SSA, as soon as you pay and individual $150 in any given year, you need to match FICA, Medicaire, with hold taxes, and file a 943 + W2's each year. If you consider them contractors, you will have to 1099 each one, or you can have a potentially large cash labor expense on your Schedule F. This can be a trigger for an audit, although many people get away with it. The problem is, if you give a high school kid cash payment, a 1099 at the end of the year, are they going to have the cash put away to pay their taxes at the first of next year? If they have a W2, they can do their taxes in 10 minutes online, and possibly get a refund. Not necessarily so with a 1099 and a self employed status. In my opinion, it's best to go ahead and set up EFTPS and be legal. A bonus to this is that the IRS will see your business as legitimate, even if you are showing some losses in the early years. Especially if you are a hard working fruit grower State laws vary widely. In Georgia, agricultural employers are not required to with hold state taxes or have workman's comp. There are other employee injury/liability riders that can be added to ag insurance policies to cover your assets at a lower cost. Companies such as Westfield in Ohio offer such policies, along with product liability, farmer's market policies, etc. The rider is basically enough to cover emergency room visits and make you held harmless in case of accident. Of course it is best to give comprehensive training to avoid worker injury, which also tends to negate the independent contractor status. Ladder falls are always a possibility. Of course, I'm not an attorney, and I definitely don't want to be one.. Brian Heatherington Beech Creek Farms and Orchards 2011 Georgia Highway 120 Tallapoosa, GA 30176 On 4/9/2015 11:01 AM, Mark Helen Angermayer wrote: I plan to hire some high school kids to help me thin fruit this year. They will only be working for about a month it takes to thin the fruit. I'm uncertain if this temporary employment would fall under employees or contract labor. I've looked at the definitions, but still unclear. Some of the requirements of contract labor vs. employees are who provides tools, and who defines work schedule. Obviously there are no tools required for fruit thinning, other than one's hands. I intend be flexible on when the kids can work, so am not setting work times. The kids would be hired individually, not as a thinning crew. The dollar cost is the same to me either way (because I plan on paying more for contract labor and less for employees) but the paperwork is less for contract labor. I'm a very small commercial grower, so FUTA is not a consideration. Any help would be appreciated. Mark Angermayer Tubby Fruits Peach Orchard ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop -- ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop
Re: [apple-crop] Employee vs. Contract labor
Mark, From the perspective of the IRS and SSA, as soon as you pay and individual $150 in any given year, you need to match FICA, Medicaire, with hold taxes, and file a 943 + W2's each year. If you consider them contractors, you will have to 1099 each one, or you can have a potentially large cash labor expense on your Schedule F. This can be a trigger for an audit, although many people get away with it. The problem is, if you give a high school kid cash payment, a 1099 at the end of the year, are they going to have the cash put away to pay their taxes at the first of next year? If they have a W2, they can do their taxes in 10 minutes online, and possibly get a refund. Not necessarily so with a 1099 and a self employed status. In my opinion, it's best to go ahead and set up EFTPS and be legal. A bonus to this is that the IRS will see your business as legitimate, even if you are showing some losses in the early years. Especially if you are a hard working fruit grower State laws vary widely. In Georgia, agricultural employers are not required to with hold state taxes or have workman's comp. There are other employee injury/liability riders that can be added to ag insurance policies to cover your assets at a lower cost. Companies such as Westfield in Ohio offer such policies, along with product liability, farmer's market policies, etc. The rider is basically enough to cover emergency room visits and make you held harmless in case of accident. Of course it is best to give comprehensive training to avoid worker injury, which also tends to negate the independent contractor status. Ladder falls are always a possibility. Of course, I'm not an attorney, and I definitely don't want to be one.. Brian Heatherington Beech Creek Farms and Orchards 2011 Georgia Highway 120 Tallapoosa, GA 30176 On 4/9/2015 11:01 AM, Mark Helen Angermayer wrote: I plan to hire some high school kids to help me thin fruit this year. They will only be working for about a month it takes to thin the fruit. I'm uncertain if this temporary employment would fall under employees or contract labor. I've looked at the definitions, but still unclear. Some of the requirements of contract labor vs. employees are who provides tools, and who defines work schedule. Obviously there are no tools required for fruit thinning, other than one's hands. I intend be flexible on when the kids can work, so am not setting work times. The kids would be hired individually, not as a thinning crew. The dollar cost is the same to me either way (because I plan on paying more for contract labor and less for employees) but the paperwork is less for contract labor. I'm a very small commercial grower, so FUTA is not a consideration. Any help would be appreciated. Mark Angermayer Tubby Fruits Peach Orchard ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop -- ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop
Re: [apple-crop] Employee vs. Contract labor
Another indicator is that, if you need to train or supervise them, they cannot be independent contractors. For example, if you hire a contractor to replace your roof, that's fine, he knows what to do. If you hire a teen and teach them how to pick, prune, etc, they are an employee. On Fri, Apr 10, 2015 at 7:24 PM, Mark Helen Angermayer angermay...@gmail.com wrote: Wanted to thank everyone of the comments on this discussion. Definitely gave me some guidance. Mark Angermayer Tubby Fruits Peach Orchard Bucyrus KS On 4/9/15, Hugh Thomas hughthoma...@gmail.com wrote: I would check with a labor attorney. “Contract labor” has been used by businesses as a ruse to skirt the requirements for matching Social Security, report injuries, avoid paying workman’s comp, etc. I went through this thing in the 1990’s and found that “contract labor” is loophole that has a small and dangerous loop. Back then, it was a auditing trigger for the tax people. Things may have changed, but I doubt that teenagers would be considered contract labor if they are under 18, need to be trained or supervised. On Thu, Apr 9, 2015 at 9:30 AM, rollinsorcha...@gmail.com wrote: I also suggest that you get clarification from your insurance company. They may have a stricter definition. My interpretation of my insurance policy is: if the person performing the work has their own insurance policy to cover work done for others then they qualify as contracted labor. Anyone without their own insurance is an employee for insurance purposes, regardless of how they are paid. Ernest Rollins Owner Rollins Orchards, Garland, Maine, USA A Family Farm since 1821 rollinsorcha...@gmail.com www.RollinsOrchards.com Ernest Rollins Rollins Orchards Garland, Maine -Original Message- From: Mark Helen Angermayer angermay...@gmail.com Sender: apple-crop-boun...@virtualorchard.net Date: Thu, 9 Apr 2015 10:01:44 To: apple-crop@virtualorchard.net Reply-To: Apple-crop discussion list apple-crop@virtualorchard.net Subject: [apple-crop] Employee vs. Contract labor I plan to hire some high school kids to help me thin fruit this year. They will only be working for about a month it takes to thin the fruit. I'm uncertain if this temporary employment would fall under employees or contract labor. I've looked at the definitions, but still unclear. Some of the requirements of contract labor vs. employees are who provides tools, and who defines work schedule. Obviously there are no tools required for fruit thinning, other than one's hands. I intend be flexible on when the kids can work, so am not setting work times. The kids would be hired individually, not as a thinning crew. The dollar cost is the same to me either way (because I plan on paying more for contract labor and less for employees) but the paperwork is less for contract labor. I'm a very small commercial grower, so FUTA is not a consideration. Any help would be appreciated. Mark Angermayer Tubby Fruits Peach Orchard ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop
Re: [apple-crop] Employee vs. Contract labor
I also suggest that you get clarification from your insurance company. They may have a stricter definition. My interpretation of my insurance policy is: if the person performing the work has their own insurance policy to cover work done for others then they qualify as contracted labor. Anyone without their own insurance is an employee for insurance purposes, regardless of how they are paid. Ernest Rollins Owner Rollins Orchards, Garland, Maine, USA A Family Farm since 1821 rollinsorcha...@gmail.com www.RollinsOrchards.com Ernest Rollins Rollins Orchards Garland, Maine -Original Message- From: Mark Helen Angermayer angermay...@gmail.com Sender: apple-crop-boun...@virtualorchard.net Date: Thu, 9 Apr 2015 10:01:44 To: apple-crop@virtualorchard.net Reply-To: Apple-crop discussion list apple-crop@virtualorchard.net Subject: [apple-crop] Employee vs. Contract labor I plan to hire some high school kids to help me thin fruit this year. They will only be working for about a month it takes to thin the fruit. I'm uncertain if this temporary employment would fall under employees or contract labor. I've looked at the definitions, but still unclear. Some of the requirements of contract labor vs. employees are who provides tools, and who defines work schedule. Obviously there are no tools required for fruit thinning, other than one's hands. I intend be flexible on when the kids can work, so am not setting work times. The kids would be hired individually, not as a thinning crew. The dollar cost is the same to me either way (because I plan on paying more for contract labor and less for employees) but the paperwork is less for contract labor. I'm a very small commercial grower, so FUTA is not a consideration. Any help would be appreciated. Mark Angermayer Tubby Fruits Peach Orchard ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop
Re: [apple-crop] Employee vs. Contract labor
I would check with a labor attorney. “Contract labor” has been used by businesses as a ruse to skirt the requirements for matching Social Security, report injuries, avoid paying workman’s comp, etc. I went through this thing in the 1990’s and found that “contract labor” is loophole that has a small and dangerous loop. Back then, it was a auditing trigger for the tax people. Things may have changed, but I doubt that teenagers would be considered contract labor if they are under 18, need to be trained or supervised. On Thu, Apr 9, 2015 at 9:30 AM, rollinsorcha...@gmail.com wrote: I also suggest that you get clarification from your insurance company. They may have a stricter definition. My interpretation of my insurance policy is: if the person performing the work has their own insurance policy to cover work done for others then they qualify as contracted labor. Anyone without their own insurance is an employee for insurance purposes, regardless of how they are paid. Ernest Rollins Owner Rollins Orchards, Garland, Maine, USA A Family Farm since 1821 rollinsorcha...@gmail.com www.RollinsOrchards.com Ernest Rollins Rollins Orchards Garland, Maine -Original Message- From: Mark Helen Angermayer angermay...@gmail.com Sender: apple-crop-boun...@virtualorchard.net Date: Thu, 9 Apr 2015 10:01:44 To: apple-crop@virtualorchard.net Reply-To: Apple-crop discussion list apple-crop@virtualorchard.net Subject: [apple-crop] Employee vs. Contract labor I plan to hire some high school kids to help me thin fruit this year. They will only be working for about a month it takes to thin the fruit. I'm uncertain if this temporary employment would fall under employees or contract labor. I've looked at the definitions, but still unclear. Some of the requirements of contract labor vs. employees are who provides tools, and who defines work schedule. Obviously there are no tools required for fruit thinning, other than one's hands. I intend be flexible on when the kids can work, so am not setting work times. The kids would be hired individually, not as a thinning crew. The dollar cost is the same to me either way (because I plan on paying more for contract labor and less for employees) but the paperwork is less for contract labor. I'm a very small commercial grower, so FUTA is not a consideration. Any help would be appreciated. Mark Angermayer Tubby Fruits Peach Orchard ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop
Re: [apple-crop] Employee vs. Contract labor
The tests usually are: do you supply the tools do you direct them do they have their own liability/workers comp insurance there may be others too Art Kelly Kelly Orchards Acton, Maine On Thu, Apr 9, 2015 at 11:01 AM, Mark Helen Angermayer angermay...@gmail.com wrote: I plan to hire some high school kids to help me thin fruit this year. They will only be working for about a month it takes to thin the fruit. I'm uncertain if this temporary employment would fall under employees or contract labor. I've looked at the definitions, but still unclear. Some of the requirements of contract labor vs. employees are who provides tools, and who defines work schedule. Obviously there are no tools required for fruit thinning, other than one's hands. I intend be flexible on when the kids can work, so am not setting work times. The kids would be hired individually, not as a thinning crew. The dollar cost is the same to me either way (because I plan on paying more for contract labor and less for employees) but the paperwork is less for contract labor. I'm a very small commercial grower, so FUTA is not a consideration. Any help would be appreciated. Mark Angermayer Tubby Fruits Peach Orchard ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop -- Art Kelly Kelly Orchards Acton, ME ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop
Re: [apple-crop] Employee vs. Contract labor
Mark- It probably falls under you state labor laws as well as federal. Your signiture box does not contain your location. In NJ we have specific guidelines for employees/youth under 18- especially regarding equipment use. Ferderal and state worker protection rules and guidelines apply as well for any employee working on your farm Contract labor would only be done through a lisenced labor contractor who would be responsible for all paperwork, permits, etc. If your hireing high school kids directly they are employees. If you google contract labor and your state- you will get more information than you want about your guidelines. Win Win Cowgill Apple-Crop Cofounder Editor Horticultural News Professor and Area Fruit Agent New Jersey Agricultural Experiment Station Rutgers Cooperative Extension PO Box 2900 314 State Route 12, Bldg. 2 Flemington, NJ 08822-2900 Office 908-788-1339 Fax- 908-806-4735 Email: cowg...@njaes.rutgers.edu www.horticulturalnews.org/ www.virtualorchard.net/ http://virtualorchard.net/njfruitfocus/index.html Twitter @mrsuncrisp http://www.appletesters.net http://nc140.org On Apr 9, 2015, at 11:01 AM, Mark Helen Angermayer angermay...@gmail.com wrote: I plan to hire some high school kids to help me thin fruit this year. They will only be working for about a month it takes to thin the fruit. I'm uncertain if this temporary employment would fall under employees or contract labor. I've looked at the definitions, but still unclear. Some of the requirements of contract labor vs. employees are who provides tools, and who defines work schedule. Obviously there are no tools required for fruit thinning, other than one's hands. I intend be flexible on when the kids can work, so am not setting work times. The kids would be hired individually, not as a thinning crew. The dollar cost is the same to me either way (because I plan on paying more for contract labor and less for employees) but the paperwork is less for contract labor. I'm a very small commercial grower, so FUTA is not a consideration. Any help would be appreciated. Mark Angermayer Tubby Fruits Peach Orchard ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop ___ apple-crop mailing list apple-crop@virtualorchard.net http://virtualorchard.net/mailman/listinfo/apple-crop
