Employees or contractors?

[thaddeus333]

What is the name of your state? Ca.

I am starting a business and so far I have not had a lot of business through the door. I own a catering company and so when I do get a job, I usually just call a few of my freinds in the industry. I pay them by check, but do not remove anything from their pay for taxes, fica etc. On average they may work for me for less than 10 hours per month. Do I have employees or independent contractors? Is there a form that they can fill out to be considered independent contractors? If they are considered employees any idea how much I am looking at for workmans comp and the other taxes that are usually deducted from pay checks? I have about 6 people who work off and on for me, I would say on a monthly average I am paying out a total of 1200 dollars in checks. Thanks in advance for the help!

 

[weenor]

What is the name of your state? Ca.

I am starting a business and so far I have not had a lot of business through the door. I own a catering company and so when I do get a job, I usually just call a few of my freinds in the industry. I pay them by check, but do not remove anything from their pay for taxes, fica etc. On average they may work for me for less than 10 hours per month. Do I have employees or independent contractors?

Depends on what set of laws you are referring to. For example for purposes of workers' compensation you probably have employees. For purposes of the IRS, if they make less than $500.00 a year, you don't have to report the income. However, if they make more, a 1099 must go to the IRS so that they can pay the taxes.

Is there a form that they can fill out to be considered independent contractors?

You can always get a signed contract, but any income over $500.00 must be reported and they need to understand that they will be paying all income and social security taxes.

If they are considered employees any idea how much I am looking at for workmans comp and the other taxes that are usually deducted from pay checks?

There is no way to estimate this, because workers' compensation is calculated per your payroll. Please note that failure to include their salaries, even as casual employees may resort in a lawsuit from the carrier for fraud.

I have about 6 people who work off and on for me, I would say on a monthly average I am paying out a total of 1200 dollars in checks. Thanks in advance for the help!

Please see a local lawyer. In most states, anything over 5 regular employees requires workers' compensation coverage. You have far too many issues for an internet site.

 

[divgradcurl]

I agree with weenor, go see an attorney. Your status as an employee is determined by the job responsibilities, not by what you agree on with your workers. Basically, if they have to come to your place of work, use your tools and equipment, and work under your direction, and they do not have the authority to work independently, then they are almost certainly employees.