Is a tenant/porter an employee?
Hi, I am on the board of a small 8 unit coop. One of the shareholders has agreed to remove garbage and clean the common areas in exchange for a $400 discount to his monthly maintenance fee. We have been told that this constitutes an employer/employee relationship the implication of which is added overhead (worker’s…
Hi,
I am on the board of a small 8 unit coop. One of the shareholders has agreed to remove garbage and clean the common areas in exchange for a $400 discount to his monthly maintenance fee. We have been told that this constitutes an employer/employee relationship the implication of which is added overhead (worker’s compensation insurance, disability insurance, taxes etc.) The shareholder/porter also ends up having to pay taxes on his discount. It seems to me that this approach is an overkill. I would appreciate any thoughts from members of the forum. Thanks.
He will be consider an employee. You may want to obtain Workers Comp and Disability ins asap. you may obtain a quote from http://www.NYSIF.com. let me know if you need any help on this website. Let me know if you have any Q regarding other policies as I might offer you a quote with State Farm. zofia@johngarfinkel.com
Denton, actually we don’t have D&o policy and I will look into it. I get the distinction you pointed out. It’s unfortunate so much time and money has to go into liability management in a small 8 unit coop (general insurance, umbrella insurance, worker’s comp. disability insurance, D&O policy..).
FG, pls see my post at 6:31. You appear not to have read it. All of the examples you give offer their services to other clients, therefore they would not be considered employees.
Board members are different, and they would not be employees since they are unpaid. Also they are covered by your D&O policy, You do have one, right?
Thanks folks. According to these criteria he should be considered an employee but so would a babysitter, dog walker, gardener, board member, pool cleaner etc…
A concise summary of factors considered by the IRS: http://www.wellesley.edu/Controller/forms/consultant.pdf
In the past, employers uncertain about worker classification could request an IRS determination by filing Form SS-8, “Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding.†I believe this form still applies. Be forewarned that the IRS tendency is to classify workers as employees whenever their status is not clear-cut. In addition, employers requesting an IRS determination lose certain protections against liability for misclassification. You might want to ask your attorney/accountant about those protections. See: http://fedbbs.access.gpo.gov/library/irs_form/fss8.pdf
See also, several IRS pages specifically devoted to the question: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
I think that’s a test that many “independent contractors” wouldn’t meet–i.e. people fired by their employees and taken back as consultants.
Would the shareholder/porter have any right to sue beyond that of another shareholder injured on the premises (outside of his/her greater likelihood of injury because of the work performed)?
Hey Bob, another test for contractor vs employee is that a contractor (in this case the shareholder) must offer his/her services on a regular basis to other potential clients. It’s unlikely that they do, but who knows.
Definitely a tricky issue. Even trickier is the liability the corporation is setting itself up for. If the shareholder injures himself in the course of his duties, could be trouble.
I’m not sure they’re even technically correct. I’m not a lawyer (and wish one experience in labor law would chime in) but I was a human resources professional for 30 years. If you were paying and supervising this person and had/she had set hours he might be an employee. If you were paying him on the condition that he/she perform a specific function without specific hours and supervision, the person would more likely be an independent contractor and, as such might have to pay taxes on any income ( for which you’d file a 1099 form, rather than a W-2). I doubt that giving the person a discount, rather than specifically paying him/her makes the person an independent contractor, much less an employee.
Still,I’ve been retired for several years and am somewhat rusty. Also, I’d defer to an attorney with SPECIFIC expertise in this area.When I was personnel director for one of the D.A.’s offices I would often consult attorneys in the City Law Department or City personnel experts, but NEVER my lawyer bosses (who knew lots about criminal law, but little or nothing about these matters).
If you ask a lawyer, you get lawyered.
Whoever told you this is technically correct. In spite of that, people manage to do these things all the time.