Paying an employee
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Paying an employee
I am a small business owner of a housecleaning company and I’m looking to hire my first employee. She will be a 1099 and I know what I want to pay her hourly but we are required to drive from job to job. So do I pay her for drive time? Using my vehicle I just want to make sure Im doing everything legally so that I don’t get into trouble in the future.
Asked on January 1, 2018 under Employment Labor Law, Florida
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 3 years ago | Contributor
First, bear in mind that if you set her hours and tell her when to work, and direct or manage her in how to do her job, she will most likely not be an independent contractor (1099 employee) but an actual employee (paid via a W-2, and where you have to pay the employer share of social security and Medicare ("FICA"), make unemployment contributions for her, etc.). A person who is subject to your control to the same extent as an employee *is* an employee and you cannot pay or treat them as a contractor: if you do, and the person files a complaint with the department of labor or takes legal action, you could find yourself liable for a significant sum of money for "misclassifying" them.
Then in terms of the payment rules for employees, since that is most likely to apply: you have to pay for the drive time from one job location to another. You don't pay for her first trip of the day, either to the office or to the very first job; or for her last trip home; but you do pay for all trips in between.
IF she were sufficiently independent of your control as to be an indendent contractor, then you would pay whatever you and she mutually agreed to: a "contractor," as the term implies, is paid according to a "contract" or agreement.
It is suggest you look up the rules for when someone is and is not a contractor and compare to how you will structure this employment. You can find those rules on the U.S. Dept. of Labor website or the IRS website, under "independent contractor."