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Advice on 1099's and workers comp
#1
I am new to this forum and need some help. We are a small security dealership based in SC. The only employees are myself and husband. We have 1099's that do business in GA. and SC.
We were audited by SC workers comp and now they are saying we owe them thousands of dollars based on last years payroll. All of our 1099's are independent salespeople and independent installers. We do not control their sales, hours, etc. I have called WC in SC and GA and nobody can tell me for sure whether we should have to pay this money based on the payroll. The other part of this equation is that 2 of these 1099's are sales mgrs. who run sales teams. They get paid an override on each sale made by a member of their team. So, do I owe WC on these overrides, as they are paid after the sale is completed where no WC claim could be filed? Any advice is appreciated! Thanks!
 
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#2
neither the employees nor the employers get to decide who is "independent" and who is not. workers comp uses different rules then the IRS.
if they are hurt collecting their pay check or meeting with co-workers, comp would have to pay.
 
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#3
A workers comp claim can be filed for (depending on the state) several years after an alleged incident, so paying after a sale is completed is irrelevant. Personally I am not an expert on those states, but if you have "Sales managers" running "sales teams", my bet is you do not meet the IRS definition of a contractor relationship, and you certainly won't meet WC Standards.

States are really tightening the noose on these,as there has been tremendous abuse of the 1099 payment method. Without workers' comp insurance, any of your "1099's" are free to sue your customers if they get hurt, since they are technically liable if the injury is on their property. I am not sure that is the business model you want, either.

My advice: Hire a lawyer.
 
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#4
Thanks for the advice.......I know I have to carry WC, I'm just appalled at the amount they want from me. This audit was because my payroll was more than the projected number. The rate they want me to pay is double what my current policy is now since it is based on a higher payroll if that makes sense?
I have tried to hire a lawyer. My lawyer does not do workers comp. Every other lawyer I talked to only sues for workers comp claims. Any ideas?





admin Wrote:A workers comp claim can be filed for (depending on the state) several years after an alleged incident, so paying after a sale is completed is irrelevant. Personally I am not an expert on those states, but if you have "Sales managers" running "sales teams", my bet is you do not meet the IRS definition of a contractor relationship, and you certainly won't meet WC Standards.

States are really tightening the noose on these,as there has been tremendous abuse of the 1099 payment method. Without workers' comp insurance, any of your "1099's" are free to sue your customers if they get hurt, since they are technically liable if the injury is on their property. I am not sure that is the business model you want, either.

My advice: Hire a lawyer.
 
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#5
You need to talk to a WC defense attorney. Most WC attorneys that advertise or are more aggressive about getting their name out are claimants attorneys. I will PM you the name and contact info for a SC defense attorney who is a member of a nationwide defense network that we partner with on seminars.
 
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#6
1-being a 1099 contractor means you will not get unemployment benefits when a contract ends, so you better learn to save a lot of money for when you will have no income and you better put aside a good 30% of your gross income for taxes and make quarterly estimated payments to fed and state

IRS website has publications you can download on business expenses and bookkeeping

.irs.gov - click on forms and publications

start reading up on tax preparation for a schedule C business - most info at irs.gov,..copied
 
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