From idea to replacing full-time salary in 4 months

Re:From idea to replacing full-time salary in 4 months by grey-area on Monday April 16, 2012 @07:09AM (#3846858)

I imagine initially both sides would be happy to treat the relationship as contractual. It's a great way to start when you are not sure of demand, and the cleaners you employ have other clients anyway (I'd say that makes them definitely not employees unless and until this is their main income). The ones who have now quit other jobs to work with him are of course de-facto employees, and he'll have to treat them as such long-term.

However He sounds like he would be happy to treat them as employees long-term anyway (if they agree to it of course), but then that's a good problem to have, and really starting with employees from day 1 would have made this far harder to get off the ground, so he's gone about it the right way, he just has a steep learning curve ahead.

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Re:From idea to replacing full-time salary in 4 months by tptacek on Monday April 16, 2012 @09:27AM (#3847229)

Both sides are probably happy because the cleaning workers probably aren't paying taxes at all.

If they were, they would be extremely unhappy with this arrangement, because 1099 employees pay both halves of FICA ("self-employment tax").

One possible way this pans out: eventually, he ends up with a worker who gets a notice of imputed liability from the IRS; that notice threatens to put the worker into bankruptcy, and so he calls an IRS help-line or his state labor board or an attorney. The IRS reclassifies all his employees and now threatens him with bankruptcy.

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