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!
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!