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Discussion Starter · #1 ·
I am a small time contractor in WNY. Over the summer, I took on the $30 safeguard grasscuts in my area.

I subbed them out to a local guy at $20 a lawn..he got lots more on most of them as they were "over a foot".

However, he quit doing the work in early July when he realized he was not making enough money.

He then got another job and worked until recently.

He has now filed an unemployment claim, and is claiming that I misclassified him as an independent contractor instead of an employee.

I'd get hit with a "penalty" of sorts..having to pay all the pack taxes..prolly end up being $1500 or so.


Has anyone been through this before? What is the best way to prove to NYS unemployment that he was indeed an independent contractor and not an employee, so that I am not stuck with a bill?

Thanks in advance for the advice.
 

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Did he have a Business Name?
Did you pay him by check in that Business name?
Did he provide you an invoice with his Business name?
Did you send him a 1099 Form at the end of January in his Business name?
If you answered no to these, then well I don't have anything else for ya.
If yes is the answer to these questions than he's screwed and your not.
 

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Did he have a Business Name?
Did you pay him by check in that Business name?
Did he provide you an invoice with his Business name?
Did you send him a 1099 Form at the end of January in his Business name?
If you answered no to these, then well I don't have anything else for ya.
If yes is the answer to these questions than he's screwed and your not.
This is waht the UEID people are going to ask.
We had this happen...
we used a contract we signed with a national...removed their name inserted ours...still was no good.
It ended up costing us 61k...yes 61 thousand in back taxes and UEID fees....
Try to deal with UEID so other agencies do not get involved...
WARNING.........................I'm hearing a lot of scuttlebutt that the IRS will be performing audits this year on small business to see if they are using IC's correctly or are they an employee.....

What ever you do do not tell that there was/is the following
time lines
training
directions
company eqiuipment used
 

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Scrrreeeewwwweeddddddd!!!

In MA, which I assume would run much like NY, you better answer yes to all of Rich's q's. We have a regional that gets audited each year and let me tell you. They make sure we sign a 1099, send in our insurance, and make checks out to the company name.

If you paid this guy under the table or paid to his name and he has no insurance, imho, you'ree screwed.

Plus, you agreed to 30.00 per cut for Safeguard? I couldn't cut the grass, nevermind do the updates for that pricing. They pay me much more than that.
 

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In MA, which I assume would run much like NY, you better answer yes to all of Rich's q's. We have a regional that gets audited each year and let me tell you. They make sure we sign a 1099, send in our insurance, and make checks out to the company name.

If you paid this guy under the table or paid to his name and he has no insurance, imho, you'ree screwed.

Plus, you agreed to 30.00 per cut for Safeguard? I couldn't cut the grass, nevermind do the updates for that pricing. They pay me much more than that.

So many thing wrong with this! SG give $35 lawn cut(a joke there getting between $85 and $105for it) I do not sub things like this out I have employees and pay a payroll company to make sure it done correcty! I too can not cut yards for $35 not enough and I know there taking over half of money for doing nothing!!!!!!!!!!!!!
 

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I would show them this with his signature on it:

Affidavit of Independent Contractor Status

I, the undersigned subcontractor, after being sworn, state as follows:

1. I am over the age of 18 years and I am an individual or an officer of the below named company or corporation authorized to execute this affidavit. I make this affidavit from my personal knowledge.

2. I maintain a separate business with my own work facility, truck, equipment, materials, or similar accommodations and the name of my business is:

_____________________________________________________________________________.

3. I hold or have applied for a federal employer identification number, or I am a sole proprietor.

4. I perform or agree to perform specific services or work for specific amounts of money and control the means of performing these services or work.

5. I incur the principal expenses related to the service or work that I perform or agree to perform.

6. I am responsible for the satisfactory completion of work or services that I perform or agree to perform and I am or could be held liable for a failure to complete the work or service.

7. I receive compensation for work or services performed for a commission or on a per job or competitive bid basis and not on any other basis.

8. I may realize a profit or suffer a loss in connection with performing work or services.

9. I have continuing or recurring business liabilities or obligations.

10. The success or failure of my business depends on the relationship of business receipts to expenditures.

I, _______________________, do certify and affirm by this affidavit that I comply with each of the above ten (10) items. It is my position that I am an Independent Contractor for Florida Workers Compensations purposes.

____________________________________________________________________
Signature, Title Date

Social Security or FEIN #: _________________________

The independent contractor should also provide a valid certificate of insurance coverage for any employees and possibly an exemption form for any officers.




______________________________
Notary Signature & Date
 

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I would show them this with his signature on it:

Affidavit of Independent Contractor Status

I, the undersigned subcontractor, after being sworn, state as follows:

1. I am over the age of 18 years and I am an individual or an officer of the below named company or corporation authorized to execute this affidavit. I make this affidavit from my personal knowledge.

2. I maintain a separate business with my own work facility, truck, equipment, materials, or similar accommodations and the name of my business is:

_____________________________________________________________________________.

3. I hold or have applied for a federal employer identification number, or I am a sole proprietor.

4. I perform or agree to perform specific services or work for specific amounts of money and control the means of performing these services or work.

5. I incur the principal expenses related to the service or work that I perform or agree to perform.

6. I am responsible for the satisfactory completion of work or services that I perform or agree to perform and I am or could be held liable for a failure to complete the work or service.

7. I receive compensation for work or services performed for a commission or on a per job or competitive bid basis and not on any other basis.

8. I may realize a profit or suffer a loss in connection with performing work or services.

9. I have continuing or recurring business liabilities or obligations.

10. The success or failure of my business depends on the relationship of business receipts to expenditures.

I, _______________________, do certify and affirm by this affidavit that I comply with each of the above ten (10) items. It is my position that I am an Independent Contractor for Florida Workers Compensations purposes.

____________________________________________________________________
Signature, Title Date

Social Security or FEIN #: _________________________

The independent contractor should also provide a valid certificate of insurance coverage for any employees and possibly an exemption form for any officers.




______________________________
Notary Signature & Date
The state of Montana does not recognize this as an executable legal document. I can only guess that there are many other states that will not recognize this document either.

Just because you require somebody to swear to something by signing a document that you provided, doesn't mean that the court is going to see it that way.
 

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anyone run into this ?

My son in-law was at a property doing a flat rate job (debris, lawn, sales clean).
Codes enforcement stopped by and informed my son in-law that were suppose to have a occupational license to due trash outs in there town! He just gave us a warning , the fee for license was $100 a year! I do not do a lot of work in this town maybe 2 or 3 a year!


anyone else run in to this? if all the town started doing this and enforcing it ! it would put a hurting on me!
 

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The state of Montana does not recognize this as an executable legal document. I can only guess that there are many other states that will not recognize this document either.

Just because you require somebody to swear to something by signing a document that you provided, doesn't mean that the court is going to see it that way.
I also get a GCL insurance cert, WC insurance cert of exemption, W9, copy of business tax reciept and copy of any licenses before he or she can begin working for me.

If that doesn't work I know about four places off the top of my head where the liar can be converted to alligator fecal matter in just a few days.
 

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Discussion Starter · #13 ·
Did he have a Business Name?
Did you pay him by check in that Business name?
Did he provide you an invoice with his Business name?
Did you send him a 1099 Form at the end of January in his Business name?
If you answered no to these, then well I don't have anything else for ya.
If yes is the answer to these questions than he's screwed and your not.
No he did not have a business name.

So all the other answers are no by default..but he did send an invoice, and I did send him a 1099.

Is that really all that matters is a business name? If so, then why do w9 forms have a spot for SSNs?
 

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Discussion Starter · #14 ·
This is waht the UEID people are going to ask.
We had this happen...
we used a contract we signed with a national...removed their name inserted ours...still was no good.
It ended up costing us 61k...yes 61 thousand in back taxes and UEID fees....
Try to deal with UEID so other agencies do not get involved...
WARNING.........................I'm hearing a lot of scuttlebutt that the IRS will be performing audits this year on small business to see if they are using IC's correctly or are they an employee.....

What ever you do do not tell that there was/is the following
time lines
training
directions
company eqiuipment used

It was less than $7k total that I paid him...even if I do have to pay I cannot see taxes and fees being more than $1500..

But there were no time lines, training, directions, or company equipment used. I sent him the work orders and he completed the ones he wanted to, whenever he wanted to...will that help me out?
 

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Discussion Starter · #15 ·
The state of Montana does not recognize this as an executable legal document. I can only guess that there are many other states that will not recognize this document either.

Just because you require somebody to swear to something by signing a document that you provided, doesn't mean that the court is going to see it that way.
yes, he signed a "contract". Unemployment has already told me that a "contract" does not matter.

I just had to send a paper in that said he was a 1099 contractor and the lady said they will be in touch.
 

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Sorry to hear abt your problems BUT this is probably only the first step in the collections process. The bigger problem is if NY has a sales/consumer use tax? Most States require you to pay tax on services and hope your State is not 1 of those. For us its 6-7% off the top on grass cuts. These agencies share their findings..... IMO its called spreading YOUR wealth.
 

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Discussion Starter · #17 ·
Sorry to hear abt your problems BUT this is probably only the first step in the collections process. The bigger problem is if NY has a sales/consumer use tax? Most States require you to pay tax on services and hope your State is not 1 of those. For us its 6-7% off the top on grass cuts. These agencies share their findings..... IMO its called spreading YOUR wealth.
That is interesting. However, if they find him to be a separate entity, I will gladly pay the 7.5% ($500 appx.) and be done with it.

They are looking at him being an employee which will probably put my business under.

~5% unemployment tax ($350)
~8% fica ($550)
fines for misclassification NYS ($2500-$15,000 per person)
workers comp.. ($2000)
fines for misclassification FEDS (too much to count)


And thats if they dont find any other "subs" we used.


RichR do you happen to know a good employment lawyer in the area?
 

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I 2nd what RichR said. This happened to us back in 2004 in SC.... During the investigation it was brought to light that the complainer was receiving Social Security Disability and he lost that and was ordered to pay back $80,000 +/- of disability payments :)

We got slapped with $14,000 in States Sales tax for unpaid/uncollected.

Best to keep quiet and see what happens... IMO
 
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