Since Doug Haas hasn't commented yet, I'd suggest asking directly for his input on this question.
I suspect this wouldn't pass the subcontractor tests from the IRS or the State though. It would all depend on how much of this work is anticipated. If it's a one or two time thing, I would just pay the employee something like $40 per hour for whatever hours he bills to the customer (assuming we are able to bill them at $60 or more). The reason for the lower rate to the employee would be because the employer will be paying state and federal taxes on those wages and the employee won't be claiming them as self-employed income so will not have to pay taxes. If it's something that is going to become a regular thing, I would negotiate with the employee for either a higher overall wage or a "project" based wage where he receives a higher (negotiated) rate based on how many hours he bills each pay period. From: Af [mailto:[email protected]] On Behalf Of Chuck McCown Sent: Tuesday, September 22, 2015 8:30 AM To: [email protected] Subject: Re: [AFMUG] Contracting an employee I would fear the IRS and department of labor in your state more than anyone else here. They frown on complex arrangements. Just resell the special service that this employee does. Do the bonus. Keep him regular payroll. No moonlighting policy as a condition of employment. If he needs to work more than 40 hours, OT and more commission/bonus is where he gets compensated. You sell his work product as your product or service. Unless you are the customer of his special services, like an electrician. Then just have him invoice you and send him a 1099 in addition to his W2. On Tue, Sep 22, 2015 at 12:16 AM, That One Guy /sarcasm <[email protected]<mailto:[email protected]>> wrote: So if you have an employee who offers a service that you do not, but works a 40 on your clock how would you handle subcontracting his services on your clock? Just for easy numbers, say he's a ten dollar employee, but he bills at fifty. You need his services during business hours. You need to bill for it. Aside from the obvious separation issues, is this really all that complicated if you have an attendance policy this would interfere with? If he's on your dime as an employee, but also billing his contracted rate, say you're ok with the double dipping, where does the liability for the service lay? From the customers perspective, I assume it's simply on the boss. But at the end of the day, how would you handle, or not handle that, concessions to attendance? How do you deal with the other employees, or is it any of their concern? As a subcontractor, I assume you can make it sort of the contract that 'll work is represented as the employer -- Lewis Bergman 325-439-0533 Cell ________________________________ Total Control Panel Login<https://asp.reflexion.net/login?domain=litewire.net> To: [email protected]<https://asp.reflexion.net/address-properties?aID=242260993&domain=litewire.net> From: 0000014ff53f518e-ed42cc83-b863-476a-832f-ecd4ff085883-000...@amazonses.com<mailto:0000014ff53f518e-ed42cc83-b863-476a-832f-ecd4ff085883-000...@amazonses.com> Remove<https://asp.reflexion.net/FooterAction?ver=3&un-wl-sender-domain=1&hID=12536049722&domain=litewire.net> amazonses.com from my allow list You received this message because the domain amazonses.com is on your allow list.
