GA Dept of Labor Audit - Wage Investigation

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wenglish

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I just received a call from Dept of Labor regarding a Request for Wage Investigation regarding a subcontractor that I have used in the past. This contractor went to the unemployment office and is trying to collect unemployment using my company as the 'employer'. My business is carpentry and I contract others to perform the work. He carries his own Workers' Comp which to me shows he is self-employed. It has always been understood that he is a contractor. He invoices for work performed and I pay along with issuing a 1099 at year end. However, according to the DOL there is an employer/employee relationship established and they don't believe I can prove otherwise.

Since he doesn't have any business license or FEIN the DOL is stating that he is considered an employee. According to all the info I have researched I have found no such licensing for this industry. Even the agent from DOL couldn't provide me with any information as to how to obtain a business license in this industry. He simply stated that I need to fill out a SS8 form for anyone I use as a contractor who would not have a license or is not acting as a business. He also stated that a signed contract wouldn't be allowed, but I have seen & used an independent contractor agreement before.

I'm concerned since I have to complete an Employer Status Report and provide gross wages for the contractor. I just started this company less than a year ago. So this is causing me much concern for the future of the business.

Any assistance is appreciated!
 
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