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DH is a self-employed General Contractor, and has typically taken jobs that only require him to complete or that he can sub-contract out to others who are also in business for themselves. But this morning, he brought up the fact that he's thinking about hiring a kid from the local vocational school to help him over the summer. Right away, bells went off for me as this is not the same thing as sub-contracting, and these are not people I could put on a 1099 as he will be training them and highly supervising them. So what I do need to worry about as far as paperwork and such.

The things that immediately came to mind is that he would probably need to change his liability insurance to cover workers, and that he will have to pay FICA on the employee. Also, I have his SIMPLE set up for 3% matching for all employees, so the person would be eligible for that. But what else do I have to do? Does he need a TIN at this point? I've always just used his SSN because it is just him, but it feels like he may now need a TIN instead.

Anybody have any insight or tips on this? I will also call the state as they are typically very helpful, but I thought I'd be able to get some good opinions and input here.
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Whooo, boy. Hiring one employee adds a lot of complexity to your life.


You can continue to use your Social Security number as an employee identification number. My liability insurance carrier send me out a report to fill out on hours worked by employees and they bill me for the additional cost ---you should probably check with your insurance agent to find out how this is handled for your contract.

Worker's Comp--- check on that coverage.

Federal and state taxes --- Yep, they are there. I did the Federal quarterly and annual tax returns myself and with no special training, but there are lots of services that will do your payroll, taxes and reports if you wish.



Seattle Pioneer
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DH is a self-employed General Contractor, and has typically taken jobs that only require him to complete or that he can sub-contract out to others who are also in business for themselves.

Does he currently obtain (annually) certificates of insurance (COI) for liability and workers' compensation from these sub-contractors? A COI is basically a document the subs would give your DH to show they have current & adequate coverage.



But this morning, he brought up the fact that he's thinking about hiring a kid from the local vocational school to help him over the summer. Right away, bells went off for me as this is not the same thing as sub-contracting, and these are not people I could put on a 1099 as he will be training them and highly supervising them. So what I do need to worry about as far as paperwork and such.

What type of work would the employee be performing? Liability concerns are very different for someone who would be entering an occupied residence as opposed to being a laborer for a brick mason on a construction site (for exampe).



The things that immediately came to mind is that he would probably need to change his liability insurance to cover workers...

At least four insurance issues immediately come to mind. General liability insurance, completed operations insurance, workers' compensation insurance, and business auto (assuming this employee might drive on company business). Is your insurance agent an Independent Agent? Talk to him/her - responding to questions like yours is what the insurance agent does to earn the commission.




Anybody have any insight or tips on this?

Is your DH familiar with OSHA 1926 - the Standard for Construction? In what state are you located? Does your DH have a safety program?



I will also call the state as they are typically very helpful, but I thought I'd be able to get some good opinions and input here.

Get help where you can, but be careful. There are likely a number of state agencies that would have impact on your operations and a person at one of those agencies may be clueless about the function of other agencies.

For example, someone at the state department of revenue may tell you "everything" you need to know about income tax reporting without mentioning licensing, insurance, OSHA, overtime and other considerations.

Could you provide a bit more information? How old is this student? Full or part-time? Will the student drive to the job site or will you transport him to the job site? Will the student ever be allowed to drive your vehicle or drive his own on company business? What type of work will the student be performing - residential, business, new, remodeling?


ShelbyBoy
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Does he currently obtain (annually) certificates of insurance (COI) for liability and workers' compensation from these sub-contractors? A COI is basically a document the subs would give your DH to show they have current & adequate coverage.

Yes, the insurance company actually requires that I provide this, so I get them from the various subs for each job.

What type of work would the employee be performing? Liability concerns are very different for someone who would be entering an occupied residence as opposed to being a laborer for a brick mason on a construction site (for exampe).

He does remodels as well as new construction like garden sheds, so yes, I can imagine the worker would be entering residences at some point. He's mostly looking for a carpentry assistant.

At least four insurance issues immediately come to mind. General liability insurance, completed operations insurance, workers' compensation insurance, and business auto (assuming this employee might drive on company business). Is your insurance agent an Independent Agent? Talk to him/her - responding to questions like yours is what the insurance agent does to earn the commission.


That was the plan already. I just thought I could get additional ideas by asking here.

Is your DH familiar with OSHA 1926 - the Standard for Construction? In what state are you located? Does your DH have a safety program?


I have no idea as I neglected to ask him, but I suspect he does as he was the OSHA rep for the previous company that he worked for prior to striking out on his own. We're in MA.

Could you provide a bit more information? How old is this student? Full or part-time? Will the student drive to the job site or will you transport him to the job site? Will the student ever be allowed to drive your vehicle or drive his own on company business? What type of work will the student be performing - residential, business, new, remodeling?


My expectation is that it probably a 17-18 year old kid from the local vocational high schools. It would be full-time for the summer, and the worker would be expected to provide his own transportation.

I do have a plan, though. The electrician that DH uses already does this to get his helpers, so I was going to speak with him and his wife [she does all his business paperwork] about what is involved and what they might have for tips.

Thanks to everyone for the input so far.
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