I was wondering how the private hires were adjusting to this new law? I’m having trouble justifying making my IC’a ( independent contractor / 1099 operators) employees when I only need them a couple months in the summer. And not even sure when or if I’ll need them at all. To get a payroll company will be an added expense , or learn to be an accountant in a Few weeks time?! Neither sound fun. If I understand correctly the Gov. passed this bill to capture all the tax money the state was losing? His focus being on UBER and LYFT not seeing the big picture and how many entities this law affects . The small business guy will be forced to close up shop. Please tell me your Thoughts …
I too am a private vendor and have had to have “employees” on standby just in case I need to call them. It is definitely a cost to have them on insurance and workers comp but unfortunately there’s no legal way around it. On the bright side, because I have $0 payroll up until now, I only pay a minimum premium of $700ish per year for the workers comp insurance. As for payroll, I’m looking into Patriot software to DIY.
When I worked for a contractor in R6 many moons ago, we were officially the employees of a personnel service like a temp agency. The owner had worked out a deal with them. The personnel service paid us on payday and the company paid the personnel service whenever the check from the government showed up, be it early or late. Rush personnel in the north valley is a company who I have known to operate similarly but again, info very old.
I’m in the same boat as you!
That plan wouldn’t work now. Be it a good one but AB5 has 3 steps you need to prove your worker is an independent contractor . B- is the catcher! “Can not be hired to do work if the hiring entity does the same scope of work. “
Sorry can’t think of the correct wording. But all of us dozer operators will need to hire other dozer operators which means they are an employee now. Need to give a W-2 at the end of the year instead of the 1099.
for more info on AB5?
anything the gov signs is not good for the working man
It’s really worth hiring out payroll. Even with tools that let you do it yourself like Intuit or whatever Quickbooks payroll app is, it is really easy to screw up, with long-term consequences.
As a former business owner(S-Corp) and contractor. I prided myself on being a fully “licensed, bonded, & insured” Sub-Contractor. At 1 time had several dozen employees, then the recession and it became just me & my wife. Still kept my insurance, G-L, W-L & Marine policys. Even with all of that, I wouldn’t have been able to pass the A-B-C test of AB5 when I worked for CWN Dozer & WT contractor’s. The good news as stated, a W-C policy with Zero Payroll costs about $700/year. Just have to report your wages during audit at renewal time. The added costs of an employee in this line of work is approximately 50% above the wages you pay the employee/operator without any markups(profits). Now add to that in California OT is after 8hr and double time after 12hr in a calendar day without an agreement (collective bargaining) you can see how expensive it has become. If I was still a contractor, I would only be an “Owner Operator” and work no more than a standard shift. As I was told many, many times
THE DOLLARS HAVE TO MAKE CENTS
I agree with everything you said! But I’m not sure how I can be an owner /op Only when I need to cover those 24hr 16hr shifts. I’m ok playing by the rules and paying for all that is needed for my crew… I just can’t justify spending all that Money then poof season is over … But if I don’t pay all that money poof I’m gone !! The fines and court fees will be way worse! Oh gov. why why why!!!’
70,000 truckers were ready to pull out of calif because of AB5! They got an exemption for now.
Those poor truckers! Between the CARB and AB5 the E-logs and the mills shutting down , I don’t blame them for wanting to leave!
- An owner is ALWAYS exempt from their W-C Policy. The insurance companies do not want the liability. Hence the reason the state requires Owner Operator’s to show proof of Major Medica Insurance.
- An owner example policy cost around $700-800 per year for a ZERO Payroll policy. Then if you get employees, you pay a percentage of your gross Payroll as W-C. As an example, the last policy I had cost approx $780/year. When I needed an operator, the cost was approx 20% of the Operator’s gross. (See my previous comme about expenses being 50% above gross) So is you have an employee that you pay $500/shift too, your “cost” would be apprx $750/shift.
- There is not a rule that says you have to take a 24hr shift. If you can only staff/work a “Standard” shift, just make sure you tell Dispatch when the order comes in.
The more I read this and re-read it . I think it’s about time to call it quits! The paper work is out weighing the fun! I thank you for your knowledge and advice!!
Take the state test and join the team!