How to pay workers,, help!!

[LB Masonry Inc]

I have just recently started my own masonry corporation. We are getting some great projects and we will start in a few weeks. However, some of my hispanic employees (masons and laborors) are not used to paying taxes and having it taken out of their check every week. My dilemma is that I want to pay them legally and keep my paperwork up to par, but to them, the notion of making "x" amount per hour and THEN having taxes taken out is a big detterent to them. Any suggestions??????

[Cole]

Tell them that they work and live in another country for free.

Price you pay.

[Allan]

LB:

I run into this sometimes, and here’s the problem. If a worker is expecting $15/hr net, unfortunately you are going to have to bump your hourly wage so that the net is $15/hr. Maybe that works out to about $20/hr. There is one big assumption here, and that is that the $20/r will still keep you competitive in the marketplace and allow you to make a decent profit. If your competition is paying 1099 wages when they should be W-2 wages, then you are going to have to take up the slack elsewhere, hopefully it’s not your profit.

[Sparks]

You could pay them as sub-contractors as well if you liked. Just strictly adhere to the law regarding whom is considered a sub-contractor, there are some qualifications but it is an option. Obviously, they'd still be responsible for taxes but maybe this would appeal more to them and you, just a thought.

[VALENT]

The taxes really need to be taken out and accounted for. They need to accept that this is a part of business. Allan is very correct but it only works if the market allows. When everyone starts paying for their share of our country's bills, we will all start paying less individually. Make 'em pay.

[LB Masonry Inc]

Yeah, thanks for the tips. I can pay these guys as subcontractors, but since they really work as employees, I would have to be stretching it to say that they are subcontractors under me. And if I tell them that they have to pay taxes and that's the way it is, they can go to three or four other employers who will pay them cash or a straight check as a subcontractor. They say, "why work for you when I can make the same wage without paying taxes across town?" Maybe I will have to bump up the hourly wage a bit.... we'll see how that looks on my profit reports.....

[giddonah]

then maybe it's time for the IRS to take a look at your competitors. I'm sick of people coming here and wanting all the benefits without paying any of the taxes. This really pisses me off. Are they children? They should be paying taxes like the rest of us schmucks.

[Allan]

I blame the entire tax system and the IRS for non or very poor enforcement. You can’t blame the poor worker who needs money to feed the family, you even can’t blame the contractor who is trying to eek out a living too and competing with contractors 1099’ing their employees. I blame the IRS (and really Congress) for not devising a fairer tax system where everybody pays taxes.

Here’s my quick solution. When a subcontractor submits an invoice, they give a quick breakout of mat and labor. Payee then withholds 20% of labor, and sends it to IRS, just like you do for employees.

[VALENT]

I vote Allan for President. However, we cant blame the IRS or the system unless we try to do our part. Specifically, report infractions. We are only hurting ourselves in the long run. As far as the "poor" workers feeding their families!!!!--many of these "workers" families are living off churches and schools and other donations. They get free medical care at hospitals and clinics. I, too, feel very sorry for many workers but am 100% positive that they are playing both sides- not paying taxes but still getting better benefits that many who do pay.