Originally Posted by Meezer
First of all, laws vary from state to state.
They would need to be Independent Contractors. You pay them, they their taxes, etc., They would need to get a waiver from your state exempting them from WC. As far as using your equipment, you can lease/rent it to them
This can come back to bite you in the a$$ right about where your wallet sits.
IF they cannot produce the proper paperwork the IRS, insurance company, DoL, etc will declare them employees and look to you for back taxes/insurance cost, etc.
as I said before
Originally Posted by basher
Have them form their own corp. if you pay a corporation you are not responsible for WC. Of course they are required to provide you with proof of proper insurances including but not limited to WC. As a owner of the corporation they are not required to carry WC on themselves. They have to jump though all the paperwork hoops though and I would imagine that they would want more money to cover the cost of insurance/taxes and fees.
IF you do not provide YOUR insurance company with a certificate of insurance on all your subcontractors they'll hold you liable at audit and you will have to pay those fee's. They require a 1099 anyone who is not a corporation and that throws up fireworks to a insurance auditor they will dig for coverages now.
I've had insurance auditors ask to see checks and invoices to vendors with names that sound more like surnames then corporate entity's to assure we are not trying to slide one by them. We track used purchases made by check very carefully for that reason.
Remember most common lease agreements require the leaser to insure/indemnify the equipment so they will need commercial auto coverage naming you a a loss payee to qualify as a sub contractor.