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Emilee Weaver
Emilee Weaver, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 69
Experience:  VP, Director of Finance
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I own a dj business, and I have 7 djs. We mostly do

Customer Question

I own a dj business, and I have 7 djs. We mostly do weddings. I have classified my djs as independent contractors. I am in CA. Is this okay, or are they employees?
Submitted: 1 year ago.
Category: Finance
Expert:  Emilee Weaver replied 1 year ago.
Hi Robert, Without knowing all the details of how you run your business, I think it is most likely these djs should be considered employees for your company. There isn't a set definition of independent contractor so it can be tough to think through. Here are some of the items to consider and help you decide:- Are they performing services that are very distinct from your existing business ( answer here would be "no:", your main business is DJ'ing, and they are providing those services, so that would lead me to believe that they should be employees)-Is the work part of your regular business ( yes = employee)- Are you supplying the tools, equipment and location for the work ( you will need to consider this) - a "yes" would mean that they are likely an employee- Do you control their work? ( tell them where to be and when, and they are not able to choose where or how they do there work) -"yes" would mean employeeThere are many other factors to consider based on the outcome of various court cases, but those first three are the big ones that I hear again and again. Also remember that California is very aggressive compared to many other states in the review and audit of employee classifications and there are penalties due for misclassification. There ARE some exceptions for specific skills, and I am not sure if Musical performance or DJ'ing would be one of those exceptions. I would recommend exploring that point with an employment lawyer specializing in California specifically. Here is a link to the CA Department of Industrial Relations which goes through a more thorough discussion, listing of court cases, and FAQ's in relation to this classification. Please let me know if any more questions arise out of this. I would be happy to help!Emilee Weaver, CPA
Customer: replied 1 year ago.
Does it matter that they only work once a week or sometimes once a month?
Expert:  Emilee Weaver replied 1 year ago.
As far as I know frequency of work is not considered. I have not seen anything to that affect. For example at my company (apparel) we have models who come to test fit, maybe once a month or once a quarter and the state definitely considers then employees. We also have graphic designers that work on a project basis ( only when we need a certain project done) and they were also considered employees. You have to look into the legal cases to make a definitive argument, but that is my first hand experience with the state.
Customer: replied 1 year ago.
Ok, I have been paying these workers as independent contractors all year. If I get an employer id and worker's comp. insurance, how do I explain this on my taxes? Do I have to catch up on taxes, or can I just reassign them?
Expert:  Emilee Weaver replied 1 year ago.
A lawyer who specializes in employment practice would be a better person to ask about this specifically. But, if you feel that they are employees you should definitely go ahead and set them up as employees starting today, and then the lawyer can better advise on whether it's better to leave the past as is or to try and go back and file retroactively. It would like be a risk/cost/benefit analysis, but I don't have the expertise in that area to assist you.
Customer: replied 1 year ago.
you are saying that I 1099 them for the first part of the year, and then I send them a W2 for the second half of the year? Won't that be a red flag to the IRS? This will be my first year to file taxes. It is a new business.
Customer: replied 1 year ago.
I want to start off on the right foot.
Expert:  Emilee Weaver replied 1 year ago.
I definitely understand, but I think this is where you need someone with more expertise on whether that would be a red flag to the governing authorities.
Expert:  Emilee Weaver replied 1 year ago.
You could make them employees retroactively, but you might need some guidance on how to file that payroll properly. Since you would have missed several reporting periods. This is where I think you need someone with a little more expertise.
Expert:  Emilee Weaver replied 1 year ago.
I think the HR or legal area will be of better help to this specific piece of your question. Definitely look for an expert with experience in California specifically as I would suggest that they are more of a potential problem for you than the IRS