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LawTalk
LawTalk, Attorney
Category: Employment Law
Satisfied Customers: 35335
Experience:  30 years legal experience and I keep current in Employment Law through regular continuing education.
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In Florida, if I work with a licensed contractor but I am

Customer Question

In Florida, if I work with a licensed contractor but I am licensed but skilled in the same trade, can I work under him as a 1099 employee.
If I do work as a 1099 employee, what do I need to have in place business wise? Do I need to be incorporated? Or can I simply be a 1099 sub contractor? Or do I have to be a W2 employee?
Do I have to be incorporated or sole proprietor registered with Florida in order to legally work as a 1099 sub contractor?
What I really want is to temporarily work for a contractor as a 1099 employee skilled in the same trade.
What are my legal obligations and requirements in any case?
Thanks
Submitted: 9 months ago.
Category: Employment Law
Expert:  LawTalk replied 9 months ago.

Good morning,

I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today.

While you are separately licensed and skilled and could certainly would be able to become an independent contractor, the fact that you are legally able to do so does not mean that you will also need the federal requirements of doing so.

If you are just given assignments and you do them and are not constantly under the supervision of your employer, and you hold yourself out as being willing and able to do work for other employers or other owners based on having your own business---then you will probably be fine if you care to go as an independent contractor.

To become independent, you don't have to have a corporation or an LLC but, you can do that if you wish. You will need a local business license from the cities that you work in for the contract work that you agree with the General Contractor to do. You also will need your own business insurance and insure your vehicle as a business vehicle so it is covered in your business use.

You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.

I hope that I have been able to fully answer your question. Please be so kind as to rate my service to you. That is the only way I am credited for assisting you.

I wish you and yours the best in 2016,

Doug

Customer: replied 9 months ago.
Hi Doug, thank you for your response.
Actually I am not licensed or certified to do business in the State of Florida at this time.
I am an experienced Electrician from out of State.
I have an associate in Florida who IS a licensed Master Electrician with the State and wants to put me to work for him as I have the same skill set and level as he does.
I want to work as an independent but in order to do it legally I have to either have my own licensed/business or work under a licensed electrical contractor as a W2 employee but my preference is to work as a 1099 employee responsible for my own taxes, insurance etc.
I do not wish to incorporate if I can avoid it.
I do not wish to be registered with the state if I can avoid it.What I want to do is work under his license - legally - but find and close my own jobs and keep 90% of the gross profits and pay him 10% for the privilege of working under his license as I am competent in the same trade.Does he have to provide workman's comp for me in any case? Or can I wave the right to workman's comp?Do I have to be at minimum licensed as a Sole Proprietor in Florida to work as a 1099 sub contractor? Legally?I am trying to come up with a clear and concise plan of action to present him with so we can proceed and start getting some work done and income being generated for both of us.Thanks!
David
Expert:  LawTalk replied 9 months ago.

Hi David,

I fully understand what you want. What you are proposing however will be illegal. You cannot not be an independent contract doing electrical unless you are licensed in the state and have a business license in the cities in which you are doing work.

You asked: in order to do it legally I have to either have my own licensed/business or work under a licensed electrical contractor as a W2 employee but my preference is to work as a 1099 employee responsible for my own taxes, insurance etc. If you are not licensed then you must to be a W-2 employee. Otherwise both you and your employer face legal and tax problems.

What I want to do is work under his license - legally - but find and close my own jobs and keep 90% of the gross profits and pay him 10% for the privilege of working under his license as I am competent in the same trade. You must be licensed in FL as well as have a business license to do this.

I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.

If you have additional questions, you may of course reply back to me and I will be happy to continue to assist you further until your questions have been answered to your satisfaction.

Would you please take a moment to positively rate my service to you based on the understanding of the law I provided by clicking on the rating stars---three stars or more. It is that easy. That is the way I am compensated for having helped you.

Thank you in advance. I wish you the best in your future,

Doug

Expert:  LawTalk replied 9 months ago.

This seems like a very crucial matter for you, and your questions and issues suggest that an in-depth conversation might best suit your needs. If you are interested, for a nominal charge I can offer you the Premium Service of a private phone conference as opposed to continuing in this question and answer thread which is searchable and viewable by the public.

Doug

Customer: replied 9 months ago.
Okay, here is what Florida Statutes say. Pay close attention to paragraph (2) starting with this: "However, for purposes of complying with the provisions of this chapter, a subcontractor who is not certified or registered may perform construction work under the supervision of a person who is certified or registered, provided that the work is within the scope of the supervising contractor’s license, the supervising contractor is responsible for the work, and the subcontractor being"That's what I am basing my questions on. Your answers would seem to be incorrect based on this statute.Title XXXII
REGULATION OF PROFESSIONS AND OCCUPATIONS
Chapter 489
CONTRACTING
View Entire Chapter
489.113 Qualifications for practice; restrictions.—
(1) Any person who desires to engage in contracting on a statewide basis shall, as a prerequisite thereto, establish his or her competency and qualifications to be certified pursuant to this part. To establish competency, a person shall pass the appropriate examination approved by the board and certified by the department. Any person who desires to engage in contracting on other than a statewide basis shall, as a prerequisite thereto, be registered pursuant to this part, unless exempted by this part.
(2) A person must be certified or registered in order to engage in the business of contracting in this state. However, for purposes of complying with the provisions of this chapter, a subcontractor who is not certified or registered may perform construction work under the supervision of a person who is certified or registered, provided that the work is within the scope of the supervising contractor’s license, the supervising contractor is responsible for the work, and the subcontractor being supervised is not engaged in construction work that would require a license as a contractor under any of the categories listed in s. 489.105(3)(d)-(o). This subsection does not affect the application of any local construction licensing ordinances. To enforce this subsection:
Customer: replied 9 months ago.
a subcontractor who is not certified or registered may perform construction work under the supervision of a person who is certified or registered, provided that the work is within the scope of the supervising contractor’s license, the supervising contractor is responsible for the work, and the subcontractor being supervised is not engaged in construction work that would require a license as a contractor under any of the categories listed in s. 489.105(3)(d)-(o)"What say you now?
Thanks!
Expert:  LawTalk replied 9 months ago.

Hi David,

My "answers would seem to be incorrect based on this statute"? Really?

I'm sorry----I thought that we were talking about an independent contractor versus a W-2 employee. Please show me in this citation where it says that federal law concerning who qualifies as independent is abrogated by this state statute? It doesn't. Federal law controls whether you may be classified as an independent contractor---not state law. The fact that state law allows you to work DOES NOT MEAN that you can qualify as an independent contractor.

Of course you can work under another licensed contractor----BUT THEY MUST SUPERVISE YOU, and they are responsible for your work. That makes you a W-2 employee----under federal law.

Reading state code is insufficient in a case where federal law trumps state law----and that is what I am providing you----answers based on both state and federal law.

FEDERAL LAW: A W-2 Employee must be provided workers' compensation coverage, unemployment insurance and you must withhold taxes from their wages. A W-2 employee is an employee that you control,directing their work, the hours that they work and the ultimate quality of their work.

A 1099 employee you don't have to provide workers' compensation coverage or unemployment insurance for, you don’t withhold taxes and you have little control over their work. They are treated as an outside company that you are contracting with to do a project---on their own time and using their own judgment.

There is typically not a choice in how you designate an employee, but rather the designation is controlled by law.

A worker is more likely an Employee, than an Independent Contractor, if the worker:

1. Is required to comply with the employer’s instructions about the work.
2. Receives training from the employer.
3. Provides services that are integrated into the business.
4. Provides services that must be rendered personally.
5. Hires, supervises and pays assistants for the employer.
6. Has a continuing relationship with the employer.
7. Follows set hours of work.
8. Works full-time for the employer.
9. Works on the employer’s premises.
10. Does the work in a sequence set by the employer.
11. Submits regular reports to the employer.
12. Receives payments of regular amounts at set intervals.
13. Receives payments for business or traveling expenses.
14. Relies on the employer to furnish tools and materials.
15. Lacks a major investment in facilities used to perform the service.
16. Cannot make a profit or suffer a loss from the services.
17. Works for one employer at a time.
18. Does not offer services to the general public.
19. Can be fired.
20. Can quit at any time without liability.

The IRS looks at 3 primary issues when evaluating whether you are employee or independent:

1. The behavioral control issue: How the employer directs your services provided, and whether the employer has retained the right to control the details of your work. The fact that state code requires your employer to control the details of your work means that you cannot be independent under federal law.

2. The financial control issue: The IRS looks at whether you can to make a profit from your business---not simply an hourly wage---and whether you can make a profit or take a loss in your business.

3. The nature of the business relationship between the two of you: Is this a strict dealing between the hospital and you-as-a-separate-company. If the employer provided benefits such as vacation, health benefits---normally only give an employee, and whether your services are simply the regular business of the business owner.

Customer: replied 9 months ago.
Okay, thanks for your clarifications.
So, based on what you said, if I want to operate under this clause:::
10 March 2016 12:36
"a subcontractor who is not certified or registered may perform construction work under the supervision of a person who is certified or registered, provided that the work is within the scope of the supervising contractor’s license, the supervising contractor is responsible for the work, and the subcontractor being supervised is not engaged in construction work that would require a license as a contractor under any of the categories listed in s. 489.105(3)(d)-(o)"How can I work it out to be all legal as a 1099 sub-contractor under his license and independent of his direct supervision for the most part.
There must be a way.
Thanks
David
Expert:  LawTalk replied 9 months ago.

David,

I sense that we are going in circles here. I already told you what you MUST do to be a 1099 employee.

You must first be licensed in your state as an electrical contractor. To become independent, you don't have to have a corporation or an LLC but, you can do that if you wish. You will need a local business license from the cities that you work in for the contract work that you agree with the General Contractor to do. You also will need your own business insurance and insure your vehicle as a business vehicle so it is covered in your business use.

You wrote: How can I work it out to be all legal as a 1099 sub-contractor under his license and independent of his direct supervision for the most part.

I'm sorry, but just because you want it doesn't mean that there is a way to do it without complying with all the state and federal laws. You are looking for a way around the law---and it simply does not exist. There is not a way. You must comply with the laws in place.

I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.

If you have additional questions, you may of course reply back to me and I will be happy to continue to assist you further until your questions have been answered to your satisfaction.

Would you please take a moment to positively rate my service to you based on the understanding of the law I provided by clicking on the rating stars---three stars or more. It is that easy. That is the way I am compensated for having helped you.

Thank you in advance. I wish you the best in your future,

Doug

Customer: replied 9 months ago.
Hey Doug, don't worry. You're being a lot more helpful and informative than you realize! ;)
As for loopholes, they aren't illegal. At least mine aren't.If I become licensed as an electrical contractor, there's no point in asking the questions I have asked.From what you say, I have to minimally be licensed to do business in Florida, pay taxes, insure etc.
I was thinking of taking the fictitious name route where registering with the state, actually local County goes.
This would would all be performed in the County, not State as the licensed Master Electrician is only licensed to business in ONE County.
In further reading the statutes and regulatory rules etc., I see that probably the best way to go with this is for me to become his Employee under W2 status, have workman's comp' paid by his company, have him do the usual tax withholding routines on my behalf and so forth.
I'd be under his Supervision - indirectly for the most part since I am extremely competent in the trade.
As for how we exchange monies with each other, this is COMPLETELY up to us, right?
I mean, I get the contracts, and perform the duties of an Electrician but he pays me 85% of the gross profits there from.
He takes 10 or 15% for his part and I pay the fees associated with our doing business together as an Employer/Employee relationship.
As long as due taxes are paid and everything is up front and transparent, this scenario should work just fine.
Do you concur?
Thanks!
David
Expert:  LawTalk replied 9 months ago.

I am not going to be able to further assist you in this matter, and I am going to opt out of your question and open this up for other professionals.

Your question is being placed back in the question list for other professionals to see, and to respond to. You do not have to stay online for the question to be active. Should another professional pick it up, you should be alerted by email unless you actively disable this feature.

There is no need for you to reply at this time as this may "lock" your question back to me, thus inadvertently delaying other professionals' access to it.

I apologize for any inconvenience and wish you well in your future.

Doug