Print

Please login or register.
1 Hour 1 Day 1 Week 1 Month Forever
Login with username, password and session length

[Steve M Smith]

I have never been asked for proof of insurance but I take a laminated copy with me to every show - I keep it in a side pocket of my gig bag.

I have a laminated certificate sitting under my mixer in its flight case, just in case anyone wants to see it. I can find an online PDF of it too if necessary.


Steve.

[Scott Slater]

You can pay someone up to $599.99 and not report it, but at $600 you file a 1099.

My accountant told me that as long as I am in charge of that person directly, that they would have to be legally added to payroll and that the IRS makes a big deal over exactly who can be 1099'd and who can't.  I went with what the accountant said, but if I can simply 1099 them it would be far lest costly to me.  Have you heard anything about the IRS disputing who can be 1099'd for this type of work?

I want to stay legal, but would love to save some hassle, and costs if possible.

[Steve M Smith]

I save a bit of hassle by having either my son or daughter help me out.  English law states that yoiu must have employee insurance for anyone you employ - unless they are family members!


Steve.

[Tim McCulloch]

My accountant told me that as long as I am in charge of that person directly, that they would have to be legally added to payroll and that the IRS makes a big deal over exactly who can be 1099'd and who can't.  I went with what the accountant said, but if I can simply 1099 them it would be far lest costly to me.  Have you heard anything about the IRS disputing who can be 1099'd for this type of work?

I want to stay legal, but would love to save some hassle, and costs if possible.

What you are suggesting is employee misclassification, and NO, don't do it.  Why?  Because YOU are responsible for all persons who act for, or on your behalf... so to protect yourself you would need to make sure any subcontract workers are covered by their own liability and workman's compensation insurances.  If they don't have those and there is a loss or injury YOU are on the hook.

The recent new law in California, AB5, is meant to stop employee misclassification.  Obviously companies like Uber are fighting it because it directly increases their labor bill by 25%.

[Steve Crump]

What you are suggesting is employee misclassification, and NO, don't do it.  Why?  Because YOU are responsible for all persons who act for, or on your behalf... so to protect yourself you would need to make sure any subcontract workers are covered by their own liability and workman's compensation insurances.  If they don't have those and there is a loss or injury YOU are on the hook.

Tim is 100% right. And I can't say enough about properly insuring vehicles and also having workers comp regardless of how many employees/day laborers you have. In 28 years of working for myself I have experienced guys getting injured and it can happen easily and quickly. One guy fell off a second step of a ladder over reaching and broke his arm, that quick and easy.

Also a concern with labor is the state DOL (at least in the state that I work) . I knew of a small shop that had a father, two sons and a helper. The helper was being paid hourly and filed on a 1099. Once, while the shop was slow the helper went to file for unemployment, the DOL agent told him that he couldn't receive benefits because he had been filing self-employed. Then the agent asked, who directs you, how do you get paid, etc.? It was determined the "helper" was actually an employee and the state DOR and DOL went after the employer and with penalties it created a financial mess for that shop.

When I first started my business the accountant advising me, said that if I am going to issue 1099s, the person receiving those would need to have things in place that made them a legitimate business. License, insurance, things as simple as business cards, something that indicated that they are acting as a independent contractor/business.


 

     

   

[Mark Cadwallader]

Besides state labor law considerations in the USA, there are federal law considerations as well. Besides the IRS coming after you, Homeland Security can check to see if you have the I-9 documentation for your employees.  Besides the paperwork violation, if you have a worker who does not have proper work authorization, that's a federal crime. (Employers are "almost" are never proscuted, but who can afford the risk?). There are various states that have laws making it a crime to hire an undocumented worker, as well.

Many states impose significant civil and/or criminal penalties for failure to carry workers' compensation insurance on employees. Even without an injury occurring, an audit by the state unemployment agency will also trigger one for workers' compensation purposes.

The above is not legal advice; states have different laws, consult with your own legal advisor; YMMV, etc.

[Brian Jojade]

My accountant told me that as long as I am in charge of that person directly, that they would have to be legally added to payroll and that the IRS makes a big deal over exactly who can be 1099'd and who can't.  I went with what the accountant said, but if I can simply 1099 them it would be far lest costly to me.  Have you heard anything about the IRS disputing who can be 1099'd for this type of work?

I want to stay legal, but would love to save some hassle, and costs if possible.

Your accountant is correct.  While some feel that they can skip filing workers as employees, if the IRS decides to audit, they will pick that apart, and it will cost you a LOT more.

I've done work for theaters where they hired me for a couple hours for grunt work.  Far less than $600, but was entered as an employee and all of the paperwork and tax withholding was done.

If it's an individual 'off the street' there is rarely a way that you can make the argument that they are NOT an employee.  One way to handle it would be if you hired a company that would then provide the employees to you. You'd then 1099 the company that you hired. Still, the end employee would be an employee of some company.  The line gets slightly blurry if that person has their own company and are self employed. But then they would be paying self employment taxes and whatnot.

Back to the original post, doing this as a 'hobby' as the justification to charge stupid low prices is exactly what the post is about.  Because the industry is full of those that feel they can do this as a hobby, it saturates the market.  Supply and demand means the glut of supply makes it much harder to demand higher pay.  Yes, it's true that if production costs for a night were a minimum of $1K, many bars would simply skip out on having entertainment.  The problem is, that artificially low demand price for the ankle biter bars also hurts the demand for production costs for bars that actually could afford it.  Hobby workers don't care if they take the potential good jobs away either.

It's really a no win situation though.  As more gear becomes available at lower prices, you'll find more hobbyists enter the market.  They don't care that they make no money for their time, and do this for fun instead of as a legit business.  This could happen to ANY business, but the difference is that this is perceived more as a fun job than say, a painter or a truck driver, and that's unlikely to change.  But the more it happens, the more it bleeds into moderate sized events that hobbyists have no business being involved in.

[ProSoundWeb Community]