Paying your employee's?

[Wiserphil]

could anyone post what and how you pay your employee's? I am looking to bring someone on in the spring. I am thinking of paying them "per" car. Thanks

[dcjredline]

Did you try to search? There was just a thread on this about 2 months ago...and probably a few from before that Id bet.

[PERFECTIONPLUS]

I pay my guys 40.00 per car. In oregon we can sub contract wich means they are responsible for any taxes, ss, etc.

[Rmd]

I pay my guys 40.00 per car. In oregon we can sub contract wich means they are responsible for any taxes, ss, etc.

Not just an Oregon thing. You can have independent contractors who receive 1099's anywhere. Just beware of the distinction between an independent contractor and an employee. The IRS is the ultimate decision maker on the subject and the Service has a list of factors which govern the outcome. Just paying someone a set amount per job isn't enough in and of itself. Search the IRS website for the factors and examples. If your guys fall into the employee category, you will need to deal with payroll taxes and workers comp insurance at a minimum.

[WillWashesCars]

Not just an Oregon thing. You can have independent contractors who receive 1099's anywhere. Just beware of the distinction between an independent contractor and an employee. The IRS is the ultimate decision maker on the subject and the Service has a list of factors which govern the outcome. Just paying someone a set amount per job isn't enough in and of itself. Search the IRS website for the factors and examples. If your guys fall into the employee category, you will need to deal with payroll taxes and workers comp insurance at a minimum.

And in most cases, the 1099's are abused and not used properly. Only in 1/10 cases will a 1099 be applicable.

[Pureshine]

I use my kids free labor

[PERFECTIONPLUS]

Not just an Oregon thing. You can have independent contractors who receive 1099's anywhere. Just beware of the distinction between an independent contractor and an employee. The IRS is the ultimate decision maker on the subject and the Service has a list of factors which govern the outcome. Just paying someone a set amount per job isn't enough in and of itself. Search the IRS website for the factors and examples. If your guys fall into the employee category, you will need to deal with payroll taxes and workers comp insurance at a minimum.

Oregon has its own 1099 laws about independent contracting. As long as that person declares themselves self employed there is no other requirements other than the usual paper work . True that the IRS is the ultimate decision maker when it comes to that though.

[wrb_subie]

I use my kids free labor

You and me both

[Rmd]

Oregon has its own 1099 laws about independent contracting. As long as that person declares themselves self employed there is no other requirements other than the usual paper work . True that the IRS is the ultimate decision maker when it comes to that though.

FWIW, the State of Oregon can only regulate its own payroll taxes, it has no authority to preempt the Fed Govt's tax laws. So you are right that the federal regs are always relevant. The fed tax rates are substantially higher than state payroll taxes, and because employers also pay payroll taxes for each employee in addition to what the employer has to withhold and pay over to the Service out of each employee's paycheck, the Service is the 800 lb gorilla that you have to worry about.

[Paul Mitchell]

The below information is from the oregon.gov website regarding independent contractors. What this tells me is that if you have any questions regarding independent contractor versus employee you should research the laws of your respective state and if you're still not sure consult an attorney or CPA familiar with this issue.

My current employer wants me to become an independent contractor. Is this OK?

Although it can be tempting for your employer to reclassify you as an independent contractor, doing so requires several changes to your current relationship and presents some significant risks for both you and your employer.

State enforcement agencies (and the courts) apply specific legal criteria to determine whether a worker meets the requirements to be considered an independent contractor. If those requirements are not met, that worker is classified as an employee, regardless of how the relationship is characterized on paper. (You can check out a summary of the state agencies’ criteria in chart form or click here for a more complete discussion.)

In general, a bona fide independent contractor must be free from “direction and control” as to how the work is performed and is almost always required to maintain an “independently established business.” If your employer starts to treat you like an independent contractor, but does not give up control over how you do your work (or you do not run a business of your own), you are still an employee--you have just been misclassified.

As a misclassified employee, you should know that you run the risk of losing out on lawful benefits and protections for employees like unemployment insurance, income tax withholding, workers compensation coverage for on-the-job injuries, minimum wage and overtime protections as well as other workplace protections under civil rights and wage and hour law. Unless the classification determination is revisited, misclassified employees will also forfeit any benefits offered to properly classified employees such as sick leave, vacation pay and retirement benefits.