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  • Paying Independent Contractor Hourly? Washington

    Hello all -

    I'm new in business and new to this site.

    I am starting a restaurant delivery service. We will pay drivers to pickup food from restaurants and bring it to customers.

    From doing a little market research, it seems all my competitors are hiring the drivers as independent contractors - not as employees. I would like to to the same to minimize liability and keep costs down.

    I've read that normally an IC is paid by-the-job. However I planned to pay my drivers an hourly wage + tips received.

    My question is : Can I classify my drivers as Independent Contractors and still pay them an hourly wage? Are there any other "tests" that they must pass in order to qualify as Independent Contractors?

    Thanks in advance!
    -Mike
    Last edited by slugmike; 03-06-2007, 01:34 PM.

  • #2
    http://www.twc.state.tx.us/news/efte...s_ic_test.html

    It's a tad more complicated than that; here's a place to start your research.

    After you finish researching, then hire a tax CPA.
    “Be not niggardly of what costs thee nothing, as courtesy, counsel, & countenance.”

    --Benjamin Franklin

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    • #3
      I've gone through those IRS tests, and I think I can have the driver position satisfy the requirements... as long as the act of paying an hourly wage doesn't automatically make them my employees.

      Here's something else I'm running into.

      What if my employees meet the definition of an IC under the federal rules, but not under the state rules???

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      • #4
        Originally posted by slugmike View Post
        I've gone through those IRS tests, and I think I can have the driver position satisfy the requirements...
        How do you figure? Don't you have the right to control what they do, when they do it, and how they do it? That's an employee.
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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        • #5
          Hmmm.. I just don't know how other companies that do the same thing are designating their drivers as Independent contractors... I guess they're just doing it illegally...?

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          • #6
            Originally posted by slugmike View Post
            Hmmm.. I just don't know how other companies that do the same thing are designating their drivers as Independent contractors... I guess they're just doing it illegally...?
            Very possibly.
            I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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            • #7
              Joe, while I agree with your position, let's be careful of the language, shall we?

              It's not as bad as some I've had to speak to people about and I'm not going to edit it out or ask you to, but the line has to get drawn somewhere.
              The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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              • #8
                Every similar business I've spoken to in washington is designating their drivers as independent contractors....

                Let me revisit my question a little bit here...

                What if the driver qualifies for Independent Contractor status under the IRS rules, but not under Washington State rules? Is this ok? Can I treat them as IC's for federal purposes, and as employees for state purposes? Or does it have to be all or nothing?
                Last edited by slugmike; 03-16-2007, 01:02 PM.

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                • #9
                  All or nothing.
                  The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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                  • #10
                    Employee...no splitting hairs about it.

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                    • #11
                      And you would have a heck of an administrative nightmare treating them as ICs under one jurisdiction and employees under another. Is there some type of trade association in the area? I'm sure other companies treating their drivers as ICs have some type of legal reasoning for it (well, maybe they don't, but it would be interesting to see why they think IC status is appropriate). Do you think they'd tell you? I don't disagree that you will probably be at a business disadvantage if your prices you have to charge your customers are higher than competitive businesses because you are treating your drivers as employees and your rivals are (probably) not and (likely) doing so illegally.
                      I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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