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  • ic question

    was wondering what exactly is "ic's" need to bring.. and what they need to cover..

    we had someone call wanting to do a 50/50 commission.. but.. we provide everything (except clippers and tools) but everything else is on the store?

    everything meaning everything. she gets 50% for her work and that's it.

    im a bit confused on this...

    she says she does 20 dogs a day... but with a bather that the store will need to get (meaning that will be me).

    is this normal?

    no the owners did not hire her cause it seemed a bit far fetched.. (esp if shes going to be using our bows which are imported....)

  • #2
    If a groomer is truly an IC they have to provide all of their own everything. Tools, shampoo, conditioners, bow & bandanna materials, advertising, their own phone line, insurance. They are NOT employees of the store, and the store only provides them a place to offer their services. The IC owns their own business, and the store owner is his/her landlord. Oh, and the IC also sets prices and collects payment. The IC pays the store owner "rent" for the space being used. The IC also pays all his/her own taxes.

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    • #3
      That is what commissioned groomers at least get. And yes the store provides all but tools. Tweenty even with a bather makes me wonder what they look like or how many hours is she going to work. If it is an 8 hour day that is 2 1/2 dogs an hour. A bit far fetched I'd say. BTW my bows are imported too, some for China some from Peru. (just play'n with ya

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      • #4
        I do 50/50 split . my employer supplies the shampoo, cages , dryers, kool lube (that i dont use cotton balls ear cleaner ear powder,
        I supply my tools and sharpening ,clippers blades,shears, combs brushes ,I have a small dryer of my own I use too.we do not have a bather so we dont book more appointments than I can handle without one.If you dont want to hire a bather then dont. If she can do 20 dogs with a bather great . would the extra grooms per day make up the bathers pay? if not it doesnt make sense to hire one.also do you have enough business to even do 20 dogs a day? that seems like an awful lot to me.But I dont know .

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        • #5
          Let me say it again. Independent Contractors supply EVERYTHING! They are business owners under contract to the store to provide a service. The store owner cannot schedule their hours. The store owner cannot even require that the IC is actually the one doing the work. If the IC wants to send someone else in to do the work they have the right to do that, and the store owner cannot stop them. The store owner cannot set prices and has no say in the quality of work being done.

          ICs have to have their own insurance and business license. They do their own advertising. They set their prices and collect the money from the client. They can hire employees to work at their place of business, be it a bather, receptionist, or another groomer. If the IC wants a bather, that's her responsibility, not yours. She has to hire one, and pay their wages plus the employer's portion of the taxes. The business owner is NOT the ICs boss or employer. They are, in effect, just the landlord.

          If you're "employer" is not following the guidelines, and it sounds like that's the case for those who have responded, run, don't walk, to the library and make a copy of the IRS guidelines. Or look it up on line and print it out. Then show it to your employer (because that's what they really are) and request that they either cut you loose and allow you to function as an IC, or make you a bona fide employee and start paying their portion of your taxes, because the IRS does not accept "I didn't know" as a defense.

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          • #6
            Actually, I've been doing some research on the difference between and IC and a "space Leasee" There IS a difference between these two, as the IC is actually HIRED to perform work for a business. It's the relationship that connects the IC and the business. The business that hires the IC, still has some control in the end result of the work performed, just not the WAY it get accomplished. In space rental, there is NO relationship beyond that of a tenant/landlord. There is also still quite a wide margin of confusion on this issue even among CPA's and the IRS itself. Also, the money that is paid in rent, is handled differently than EARNED INCOME provided by an IC. It's handled as rental income and thus, not subject to self employment tax (according to the CPA's that I've talked to). So, there IS a difference.


            Here's the IRS Language on determining worker status.

            It is critical that you, the business owner, correctly determine whether the individuals providing services are employees or independent contractors. Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors. If you are an independent contractor and hire or subcontract work to others, you will want to review the information in this section to determine whether individuals you hire are independent contractors (subcontractors) or employees.

            Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. The person performing the services may be -

            An independent contractor -

            People such as lawyers, contractors, subcontractors and auctioneers who follow an independent trade, business, or profession in which they offer their services to the public, are generally not employees. However, whether such people are employees or independent contractors depends on the facts in each case.

            [B]The general rule is that an individual is an independent contractor if you, the person for whom the services are performed, have the right to control or direct only the result of the work and not the means and methods of accomplishing the result. [/B]

            Example: Vera Elm, an electrician, submitted a job estimate to a housing complex for electrical work at $16 per hour for 400 hours. She is to receive $1,280 every 2 weeks for the next 10 weeks. This is not considered payment by the hour. Even if she works more or less than 400 hours to complete the work, Vera Elm will receive $6,400. She also performs additional electrical installations under contracts with other companies that she obtained through advertisements. Vera is an independent contractor.

            An employee (common-law employee) -

            Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.

            Example: Donna Lee is a salesperson employed on a full-time basis by Bob Blue, an auto dealer. She works 6 days a week, and is on duty in Bob's showroom on certain assigned days and times. She appraises trade-ins, but her appraisals are subject to the sales manager's approval. Lists of prospective customers belong to the dealer. She has to develop leads and report results to the sales manager. Because of her experience, she requires only minimal assistance in closing and financing sales and in other phases of her work. She is paid a commission and is eligible for prizes and bonuses offered by Bob. Bob also pays the cost of health insurance and group-term life insurance for Donna. Donna is an employee of Bob Blue.

            A statutory employee - D/N/A in our situations
            A statutory nonemployee - D/N/A in our situations

            In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.

            Common Law Rules

            Facts that provide evidence of the degree of control and independence fall into three categories:

            Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

            Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

            Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

            Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.

            The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.

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            • #7
              Yes there's a difference between IC and space rental. I have both in my salon. I have had discussions with the IRS in regards to what is allowed and what isn't. I'm 99% certain I'm doing things legally and this is what they've told me is allowed under the law.

              I hire an IC to help out on Fridays and Saturdays. I ask her how many dogs she wants to do and when she wants to come in. I schedule the dogs and let her know what she's got. She takes that information and makes her own schedule. I have no control over how she accomplishes the task at hand as long as it's done in the time alloted and done to my satisfaction. She has a minimum of tools. I supply the tub and table as well as the shampoo. I collect the money, yes this is legal according to the irs. I pay her her 50% at the end of each week and give her a 1099 misc form every year at tax time. It's about the degree of the relationship. The dogs are brought in by my advertising and she can tell me when she's available, I'm not allowed to demand she work on any given day as I'm not her employeer but her contractual employer, which is different.

              I also have a space renter. She runs her own business and I have nothing to do with it. She simply gives me a check at the beginning of each month for her space. She takes care of everything including her table and her own shampoo. I also have no control over the quality of the grooms she puts out, luckily she's incredibly talented. She does not receive a 1099 form but gives me one for the rent she's paid me at the end of the year..

              A contract employee is just that. You make a contract and if you make a contract that says you pay for the bather then so be it. You can also make a contract that says she's responsible for hiring her own bather. You're hiring her to do a job. You have to outline exactly what you want her to do and who's responsible for what. 20 dogs a day......I don't know about that. Even with a bather that's pushing it IMO.

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              • #8
                I work 50/50 (also typing in the dark got a kid asleep on our bed bear with me) I have all my tools clippers, blades, scissors, brushes etc...
                My boss buys shampoos, conditioners, sprays... pretty much all consumables. Occasionally I want to try something new, and I buy it myself. She would pay for it, but I feel if it is something new I want to try out I just get it myself it is no biggie. In fact I have never in 3 years asked her to buy anything for me to have fun with. I just feel if it is a new "toy" for me to try why should she it's not like it is something we need just something I saw and wanted toplay witrh.

                I am the only groomer though in a boutique/bakery/retail.
                If you sweat the small stuff, all you have is small soggy stuff.....

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                • #9
                  Gonegrooming, thanks for that informative reply. Good to hear that you've actually spoken to the IRS about this and gotten a definitive answer This really helps me and I think before I hire or lease space, I'll ask them directly as you did. Thanks again!

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                  • #10
                    =/

                    we decided not to use her..

                    she says she wants to be ic.. but the way i see it its going to be too much headache. she wanted us to do everything and her just work. but she doesnt want to do salary (our place gives salary instead of 50/50)

                    salary is pretty much similar to 50/50 considering that the owners do chime in and help out when it gets busy so in the end the groomer just does the faces and touch ups.

                    i think they pay around 3-4k a month or so for the groomers (depends on experience) *shrugs* its up to them.. not my business.. but i do get pissed when i see one of the owners not being direct...

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