Salesperson commission?

[rfwoodvt]

VeeGee,

You might want to double check on the DBA being enough to avoid the FLSA headache and you might be OK with DOL.

On the other hand, once the salespeople earn above a certain threshold amount you will need to file 1099's

When the IRS sees the same ssn on a W2 and a 1099 from the same company some flags are likely to be raised.

The IRS has this thing called statutory employee and they specifically use an example of "independent sales" as often being "statutory employees."

Our wonderful Congress has made it so the burden of proof in these cases falls upon the accused (employer) and not the procecution (IRS/DOL) so it is a matter of being guilty and needing to prove your innocence if they ever decide to question you on it. Would hate to see you nailed for back taxes and penalties!

FWIW once they open an investigation, if they find any problems they can go back as far as they want with essentially no statute-of-limitations. That means if you have been doing it this way for 75 years they can go back that far to try to "collect."

 

[ward]

Suppose you run the salesman as an employee. You'll need to have a worker's compensation policy. For a salesman-estimator, the rate is around 1% or so. For a tree worker, the rate is...well, you know what it is for you. My understanding is that said employee will always be classified under the tree worker's comp rate, rather than the estimator comp rate even when the employee is wearing the salesman hat unless you keep verifiable time records by the employee. That means daily records kept by the employee and some method of switching back and forth on the two rates in your quickbooks platform. Verifiable time records must be summarized in the accounting records when you get your worker's comp audit.