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It is time to hire a few people |
Independent Contractor vs. Employee
Q. If they come and work for me for a day, are they Independent Contractors or are they Employees? How do I know the difference?
Employee
An employee is someone whose work you control. Paid by the hour, day, week or month. Working at your place with your tools. Working when you say so (9-5 PM, 8-4P M, 9-12 AM, 4 days a week...). Working the way you want that person to work.
Contractor
I will contract with people for brief periods of time to do a specific thing. They are like Plumbers. They work where and when they want and with their own tools. They train themselves. Your job is to pay what the contract states. You must keep track of what you pay these people. Once over $599, you must send them (and the IRS) a 1099. You do not need to do this if they are incorporated.
If you live in California, there are some documents you need to give your independent contractors to sign. They must state that:
| the workers are not illegal immigrants |
| they are covered by your state's Bureau of Workers Compensation. |
You will have to have a copy of their soc. security numbers.