Q: I have a small cleaning business in NY and I want to send people out to clean.
At this point, I don't have a large clientele, so I would like to take on people as I get the jobs, like gigs. It seems like the best way to go would be to take them on as independent contractors instead of employees until I have more steady work for them. How would I go about this and what type of paperwork would they need? Is it possible or common to shift people from IC to an official employee when business picks up? Lastly, I am insured, but can I insure an independent contractor?
A:
They will be your part-time or as needed employees. You will need to insure them as such and withhold taxes for them and comply with all DOL laws.
If they were independent they would have their own cleaning businesses, would advertise, would have their own business websites or bank accounts for their businesses, and would carry all of their own required insurance themselves.
What you call them is irrelevant. What they do and how they do it is what counts. If a plumber hired independent contractors to perform plumbing services those persons would also be employees. They are in the same industry performing the same services as their employer performs at the direction of and as required by the plumbing business.
If I hired a cleaner or a plumber they would be independent contractors. But I would need to feel confident that anyone working in my premises was fully insured. Otherwise everyone, including me and the "employers", would be fair game for paying all expenses related to any on-the-job injuries, etc..., possibly for life.
Some businesses take those risks. They falsely believe a signed contract calling someone independent actually makes them independent. It does not. The penalties and possible lifetime medical bills you might be stuck paying make this a risky choice. Good luck.
Samuil Buschkin agrees with this answer
A:
When individuals are hired to perform the main services a business provides, they should be classified as employees regardless of hours worked. Business that hire individuals as independent contractors and later change their classification to employees automatically create a red flag for the Department of Labor and potentially the state and federal tax authorities.
Hiring employees requires an employer to have workers compensation insurance, pay into the unemployment fund and comply with all employment laws, including wage and hour requirements, paid sick leave, state and city vaccination and mask requirements etc. I would recommend you hire employment counsel to advise you on how to handle this correctly and comply with all employment laws.
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