Jean Hanson

Many cleaning companies want to grow their cleaning business but don't want the hassle of hiring employees. That's because there's a lot of paperwork, taxes and insurance to pay. Instead, they decide that it's much easier and less expensive to hire subcontractors to do the work and then give them a 1099 so the individual has to pay their own taxes.

The problem is, the IRS has laws regarding the hiring of subcontractors. There are three primary areas of concern:

1. Behavior. Who controls the work performed by the individual? Does the company have the right to control what the worker does and how he or she does it? When a person is truly an independent contractor, he or she is self-employed and is contracting with a company for a specific task.

2. Financial. Who controls the business aspects of the job - how the individual is paid, whether expenses are reimbursed, who provides the tools and equipment to get the job done? If the employer provides cleaning equipment like vacuum cleaners and mops, then they have control over the job, which means the individual is an employee, not an independent contractor.

3. Relationship. Are there written contracts or employee benefits like insurance or vacation pay? Is this to be a continuing relationship? If you hire an individual with the expectation that he or she will continue working for you indefinitely rather than for a specific project or a limited time, then the IRS generally looks at this as intent to create an employer/employee relationship.

To find out more about whether a worker is an employee or an independent contractor read Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Many cleaning companies want to grow their cleaning business but don't want the hassle of hiring employees. That's because there's a lot of paperwork, taxes and insurance to pay. Instead, they decide that it's much easier and less expensive to hire subcontractors to do the work and then give them a 1099 so the individual has to pay their own taxes.

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Steve Hanson helps owners of small cleaning companies build a more profitable and successful cleaning business through his online community at TheJanitorialStore.com. Read inspirational cleaning success stories at http://www.cleaning-success.com, and sign up for weekly cleaning tips at http://www.TheJanitorialStore.com.