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Employees v contractors

timc's picture

I am considering the costs involved of hiring employees v contractors for certain tasks. The dilemma I have is that if they are classified as contractors they have to be licensed but not all tasks have to be performed by somebody with a license. If, for example, I have somebody come by to pick up the trash and haul it for me then they don't have to be my employees but they don't need to be licensed either. If they have insurance then can I hire them as (legitimate unlicensed) contractors and 1099 them without my workers comp or liability insurance companies insisting that EVERYONE PAID AS CONTRACTORS AND SENT A 1099 has to be classified as something and therefore licensed. Are there other instances where someone can be hired as a sub without needing a license? E.g. If I hire someone who occasionally picks up and delivers things for me such as drywall, rock etc

tim (post #207696, reply #1 of 7)

Where are you located?

Are you a general contractor?


A Great Place for Information, Comraderie, and a Sucker Punch.

Remodeling Contractor just outside the Glass City.


California, yes, a general (post #207696, reply #3 of 7)

California, yes, a general contractor

Well, I don't need a license (post #207696, reply #2 of 7)

Well, I don't need a license to write software as a contractor.

Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well-warmed, and well-fed.  --Herman Melville

In California employees are DEATH to a small contractor (post #207696, reply #4 of 7)


I am a General and Electrical Contractor in California.  I have a policy NEVER to have employees.  The state of California just has too many onerous requirements for insurance, withholding, reporting and handholding if you have employees.  Ask me how I know.

In addition, the state frequently attempts to characterize (or recharacterize) your workers as employees rather than contractors (so as to properly protect them).  This means you need to be really careful to engage only another company (preferably one with a contractors license from the CSLB) rather than any single individuals EVEN TO HANDLE YOUR TRASH.

I work alone (which actually isn't the best when doing electrical work) or for bigger jobs I work with a one or more of a group of others who have contractors licenses.  Sometimes I engage them (but never hire them) and sometimes I am their subcontractor.



I often work the same jobs as (post #207696, reply #5 of 7)

I often work the same jobs as a certain GC who has employees - and nothing else. Guy's been in business for decades, and owns virtually nothing in the way of tools. He gets by borrowing, primarily from the customer. What ladders, etc., he owns are fished from dumpsters. Every job, I have SOMETHING walk off - be it only a pipe bender or a shovel. (Now you know why my garden hose is pink!)

Not very professional.

Now, let's look at a little job I have coming up, as a homeowner. I will need a concrete slab, perhaps 5-ft.x 12-ft. x 4" thick. Do I hire 'employees' or a real contractor?

If I hire individuals, I get to supply everything. I get to buy and transport the materials. It's my problem to find a mixer, a chop saw for the forms, etc. Plus, someone gets hurt, I get to foot the bill.

I hire a contractor, all those problems are his. Plus, I don't need to be there.

Few 'general contractors' really are general contractors, in that they plan and run jobs with multiple trades. Instead, they're just handymen, doing all the miscellaneous things that don't require a specialty license. Things like my little slab. What's your business model?

little job I have coming up, (post #207696, reply #7 of 7)

little job I have coming up, as a homeowner. I will need a concrete slab, perhaps 5-ft.x 12-ft. x 4" thick. Do I hire 'employees' or a real contractor


we know you dislike diy, but only 2/3 yard?  In the time it would take to schedule somebody to do that, you could have it done by yourself ! 



and for less than 2 jacksons and 1 hour of your time if you had bought those torn $1 bags of 80# at the big box. If you have problems finding your mixer, you must have a bigger junk pile out back than me <G> -- them mixers is pretty hard to misplace.

Is that worker an employee or an independent contractor? (post #207696, reply #6 of 7)

Is that worker an employee or an independent contractor? Check this great article to learn how to classify workers:


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