My previous employer wants me to come back and run equipment for him. I told him that I would do it but that I would contract out to him for my services. Has anyone ever done this "contract operator" work before? What should I charge? Insurance? This might be my new venture. BTW-It is environmental work. Spill cleanup, pipeline exposure, etc. I will be running his equipment not mine.
by being a "contractor"...haven't you lost all benefits provided if any by that employer? as a subcontractor, are you subject to pay some fed/state/county/city taxes or get licensing in that jurisdiction? if work becomes slow, being an independent contractor, are you able to draw unemployment benefits? by being a contractor, what liability are you exposing yourself to? do you have to maintain your own liability insurance? i think you at this point have a decision to make. either dive in, assume the risk, or keep drawing a w-2
Just something to think about - if you are using his machines and he is directing you as to what needs to be done and where, when or how it is to be done etc. etc. - then aren't you technically an employee, not a contractor...? If you get to decide those variables, or bring you own tools (machines) you would be an independent contractor. Or maybe if you worked for many different contractors..?... At least that's how it was explained to me by someone in our state offices. It may be different where you are but you should check before jumping into agreement. Good luck,:thumbsup
A independent contractor would get a 1099 at the end of the year instead of a w-2. You need your own DBA, checking account, insurance, and would not be accountable by his time tables. Using his equipment only IMO would not put in the 1099 bracket but if you ran other contractors equipment besides his that would work. You could check with a tax pro to see if this would work, if so you would have to make your own deductions from your taxable income. The rate to charge would be more than a employee per hour and enough to cover your over head plus profit.
"i think you at this point have a decision to make. either dive in, assume the risk, or keep drawing a w-2" i think i was very clear on the point...either he's working as an employee, or he's on his own.
Clear to me but maybe not to Copenhagen. The tax stuff and insurance stuff and the DBA stuff and all the other stuff is different than "just dive in".
My goal would be to travel around working for many different environmental companies. From previous experience, many dont have operators that are capable of running larger pieces of heavy equipment due to the fact that they dont see the larger spills or exposures on a consistant basis. I have been doing some calling around and most have said that they could benefit from an experienced operator, but could not keep that person busy in equipment every day. As far as insurance and tax information, I really dont have a clue what you guys are talking about. I dont have enough life experience (only 23) to understand the complexities of those issues. So keep it coming but do your best to keep it simple enough for this kid to read. Now that I think about it, I would be a sub-contractor for the environmental companies.
Besides the advice the others have given, a few specific thoughts I have.... I don't think the tax question is as important as the insurance question, especially in light of the environmental nature of the work you're looking at. For one thing, you won't have any worker's comp coverage if you get hurt on the job. That's something employees have. For another, there are certain rights, under labor law, employees have that do not extend to "contractors". (Like overtime pay, for one.) For another, you, as a "contractor" would need liability coverage, in case you do something that does harm to the interests of someone else. I phrased it that way becasue it involves more than just breaking something like a pipe, or scratching the paint on a vehicle. What if something you didn't do quite right causes groundwater contamination that results in a whole town not being able to use well water anymore? What if it makes people sick? I don't know how much insurance environmental companies carry, but I'd bet it's in the multiple millions of dollars. Not only do you need to worry about what happens today, but you need "completed operations" coverage, in case something turns up a few years from now, and you'd need to keep carrying that even after you decided to do something different career wise. I question whether you could find somebody to write you a policy, and even if you did, you'd need to charge the customer enough to cover it. And when the job's done, and you're sitting waiting for the next call, you need to keep paying the premiums. Tax wise, if you don't understand what's involved, an accountant will be happy to charge you for his expertise. I think you'd be better off, if you want to do what you describe, to offer to work on the basis of a "temporary, full time, employee". Let the company, or copmpanies have the insurance headaches, cover you with worker's comp, and at the end of the year, you walk into H&R Block with a handful of W-2s, rather than just one. BTW, I'm in sort of the situation you describe. For years, I've worked mainly for one builder. I've had my equipment on the job, right next to his. As needed, I'd jump off my machine and onto his, and his operator would use mine. Billing gets to be a headache, because now you need separate rates for operating own machine, operating customer's machine, customer's operator on own machine, etc. (Oops--is that renting out my equipment? Am I insured for that? Luckily that never came up either.) On top of that, I'd hire their machines for contracts I got with somebody else. We've always traded invoices and checks back and forth, to keep things on the up and up. These days, I'm spending a whole lot of time on the customer's equipment and not so much on my own, but I'm still paying my own insurance, and I'm dictating my own hours. I think I'd pass the test for being a "contractor" rather than an "employee", but fortunately, it's never come up. One other thing--the crane they used to have was a real POS. I ran it, but I was never comfortable that it was as safe as it should have been. For that particular piece, I told them they'd have to have me on their payroll, as an employee . I'd get a W-2 at the end of the year for only a couple hundred bucks some times. No liability concerns for me or my insurance company that way, also in light of the fact that my insurance was/is for digging--I don't even know if I'd have had coverage for crane work.
Thanks for all the input everybody. I am headed to Texas tomorrow for a few weeks to work a fuel spill. The contractor and I agreed that I would be put on as a temporary employee but i got to set my own rate. I have already had 3 calls for work just by the word getting out by my previous employer. Hopefully this will get me through the winter. Thanks again.
I think a person can get contracted as an Expert in his type of work mainly to smooth out that type of work for any contractor that needs his knowlege. This would let you do most anything on an hourly contract. Its being done by businesses other than excavating and by excavating contractors also. There are some good things and some bad things about this type of contracting. That bad things are that you won't be covered by workmens comp and maybe you should have your own liability insurance. The good things about this is that everything you spend when away from your home is deductable like motels, meals and fuel. Also all tools you buy to do the job and your truck or car can be depreciated on your taxes. You will also pay uncle Sam less on your taxes.