What makes you a sub contractor?

What makes you a sub contractor?

Subcontractor is a person who is awarded a portion of an existing contract by a principal or general contractor. Subcontractor performs work under a contract with a general contractor, rather than the employer who hired the general contractor.

Is it better to have employees or subcontractors?

With employees, you’ll have more control, but more compliance obligations. With contractors, you’ll have less compliance obligations, but less control. In the end, it doesn’t really matter what you say, it matters what the IRS says.

How do you determine if someone is a subcontractor?

For example, if you tell a worker simply to dig up a customer’s yard and let him use any tools he has available, he’s a subcontractor. But if you tell the same worker to use a rototiller and start on the east end of the yard, he’s more likely to be considered an employee.

Is a Labour only subcontractor an employee?

From an insurers’ perspective, labour-only subcontractors are regarded as employees for the purposes of Employers’ Liability insurance, so payments made to them need to be included in the wage roll figures declared to your insurers each year.

Who is considered an employee?

The dictionary definition of “employee” says succinctly that an employee is “a person who works for another in return for financial or other compensation.”3 Under that definition, independ- ent contractors would appear to be employees.

How do you know if its a contractor or employee?

An employee is on a company’s payroll and receives wages and benefits in exchange for following the organization’s guidelines and remaining loyal. A contractor is an independent worker who has autonomy and flexibility but does not receive benefits such as health insurance and paid time off.

Do subcontractors have a boss?

The general contractor oversees the project and delegates work to the subcontractor. Subcontractors may also have direct contracts with other subcontractors to perform a portion of the work under contract.

What is the legal definition of a subcontractor?

A subcontractor is a person or entity that has been awarded by the general contractor the performance of part of the work or services of an existing contract entered between the general contractor and the (original) contracting party.

How long can you subcontract to a company for?

There is no maximum time limit. If a contractor and a company are both happy to continue working with each other then that’s perfectly fine. However, you may want to renegotiate your contract after a while as you build up more experience.

What is the difference between workmen and employee?

A workman is a man who is working. The term is most often used of men engaged in manual labour although workmen may well be craftsmen, highly skilled at what they do. Again, a workman may be self-employed or may work for others. An employee is someone, whether male or female, who is employed by someone else.