Contract labor vs. Hiring employees

[jordan30107]

I am in planning for next years season and this will be the first year of compensating help (actors / security / staff). I have been told for our business it may be better to hire employees as contract labor for the month vs. Hiring employees and having to provide workers comp. insurance. What are other haunts doing? We are looking at a staff of 40-45 and will be open for the month.
I have been advised to look at contracting all employees that have their own insurance and will work for a specified cost per night (eliminating minimum wage laws.) I would definatly carry a policy for accidental insurance for employees to cover myself. Has anyone took this route in the past? Any info would be appreciated!

Ricky

[supermatic]

You will need workers comp in both cases.

[extreme evil]

That's what I do.

[darkXmoon]

Contract work is they way to go now and I have seen it popping up more and more. The problem with that is what happens when they show up late or are leaving early. An I don't mean like once in a blue moon, I mean every night. I actually had problems accepting money from my last haunt because I felt guilty because I was always an hour or two late due to my real job. Now, are they all going to be like me , hell no. No your problem is going to be give me my money, i showed up didn't I. You really have to go about this as what do you feel comfortable with.

[Allen H]

Contact a lawyer or CPA who deals with labor. In some areas if a person is contract labor then you cant legally set their hours. They can let you know how to legally do it.

[jordan30107]

Thanks all for the info..Those of you that have worked or had contract workers is supermatic correct about still having to provide workers comp insurance? I am not sure if different states have different laws and regualtions on this but I was wondering if anyone has delt with this before.

I have a HR specialits at a larger company that gave me some help about this type thing told me that I could Hire a contractor "Actor" to provide a service "Acting" in my business and as long as a contract was drafted stating the requirments such as dates, times, and require them to provide proof of health insurance. Kind like hiring a band for a party, you pay them to provide a service for a set fee. I would obviously purchase a accident policy for all "contractors" and hold liability insurance for the haunt.

I am trying to be creative and limit the aount of paperwork , tax prep, etc.. since this is our first year.

[Greg Chrise]

Using a company large enough to even have a human resources officer is going to steer you into all kinds of things you don't need. Minimum requirements are set both at state level and federal level and generally you have to crash 50 full time all year long employees to be mandated to require anything. That isn't to say a good business man would not have all of these things, it just isn't mandated unless you are setting your self up to accept federal contracts.

Then the perception is "hours worked" like you are employing people 30 or 40 hours a week all year long vs. seasonal. Only a certain kind of person is going to accept seasonal work. Generally it is people taking on additional employment. Still you are either making this proposed money to pay all of these things or you aren't in the beginning. It is somewhat customary that 5 years might pass before you are demanded to enter the world of taxation and the business by then should be theoretically doing well if it lasts that long.

In Texas many haunts are paying nothing, $10 a night or $30 a night or some cents per customer. At this point it isn't contract labor, it is more like employee owned environment and even having that "job" mentality is where people get into trouble with taxes, insurances and not correcting the authorities from the very beginning.

You have to get into your States labor relations board documents and if there isn't a specific catagory, it is up to you to be as upstanding as possible. Making 1.2 million per season and paying $10 isn't going to cut it when someone was under the impression they were going to get paid by the hour and their taxes would be taken care of and go to the labor relations board or file for unemployment and you didn't pay into a system.

All these documents come down to the perception and acceptance of conditions with the helper. If you are paid by percentage, it is more like commissioned sales. All these entities care more about collecting tax on income. So it becomes a 1099 issued instead of filling out a W-4 form. Ultimately everything works out at a percentage of income for the entire event, how it is divided up and recorded. A 1099 means who ever has made more than $400 per year gets one of these and is responsible for paying their own taxes on this amount and all the other billions they are supposedly hauling in.

You kind of screw up even using the phrase contract labor as this means you gave them an address, a time to be there, they had their own tools and work without any supervision required. Haunt actors are not that and if you declare this, this is what sword you get judged with. It is not an out.

If you have been in business for 5 years and are making enough to be paying minimum wage plus all the taxes on top of that, you should be in the eyes of the authorities. If you want to go the employee route with no paper work, run everyone through a temporary service that does all of this paper work and compliance for you. A registered service that hires temporaries stays competitive by not having to pay unemployment compensation and by the nature of their business laws does not keep people longer than 90 days where they would have to comply with all sorts of payouts. An individual business that is not one of these services is not allowed to do this. Hence temp services are popular.

It all comes down to what was expected as compensation with each worker. What they were told and understood. Throwing around terms like contract labor gets every brother in law thinking they are an accountant or what you do is violating some union rules and you can't do that disputes begin.

Below a certain dollar figure, it is a labor expense, not a a heirarchy of employment regulations. What that figure is varies by State and reflects in how the federal government treats those states workers. Some states have minimum wage set lower than the federal minimum wage and the state ruling superseeds. Super seads.

The proper term is self employed. This means the individual does what ever they need to do to make a living and tell the government how much they are going to get. Thats the 1099 form. Upon acceptance they fill out a W-9 form and it is done. Compensation can be $5 or $5,000. They can be part of an organization or on their own, what ever it takes to make a living and be self employed. You can do some things for free or charge by the hour or by the job because it is up to the self employed person to decide what they want from a transaction.

Even an accountant will screw you up, they all only know how to work for someone or what one would expect being employed. Learn how to do your own taxes and it is all on the forms. All of this stuff is on line and you can sort of get it from the horses mouth for free. Kind of lke to be a genius you read the instructions on a can of something.

These people are self employed or they are temporaries registered with a licensed temporary service.

[Greg Chrise]

What you are supposed to do is have 3 shifts of accountants sitting in the jump seat of the limo making tabulations every time you hand out $3 to anyone.