I don't want the hassle of a payroll.

June --

I am from Vancouver, Washington I work for a Supported Living Agency.

Just starting as an indie. I am starting a 16 voice, Male Choral Ensemble here in Vancouver. I had hoped to pay my singers and director a percentage of net sales from each concert series. I thought I could treat them as independent contractors and only have to issue a 1099. I had hoped to do this mostly to avoid all the payroll expenses associated with having employees. I am finding that the IRS would not allow such a classification.

I am now looking for alternative solutions to this dilemma. I am operating as a sole proprietor currently, but wonder if there is another structure that would allow me to pay my people, but avoid the workers comp,unemployment and any other expenses that would take money away from the business. Is there a way to have contracted singers even though the compensation is minimal and would not in the beginning even cover minimum wage?

Matthew


Dear Matthew,

The structure or entity setup of your business is not the determining factor in how someone is paid. The determining factor is the kind of work relationships there are between the person or business doing the hiring -- that's you -- and the people working for you.

Those relationships determine whether it's an employer-employee work arrangement or an independent work arrangement. Read this column from my website for a better understanding: It's all about relationships: Are you an employee or are you self-employed?

-- June