For Lakewood movers, it is more convenient to use W3 employees instead of contractors, because there is quite a significant difference between the employee/ employee professional relationship and a company/ contractor relationship.
Besides, state agencies and IRS, which determine this type of classifications, decided that classifying a helper as an independent contractor would be difficult, especially when they work directly for a moving company and are being paid with an hourly wage.
On the other hand, a driver can be considered an independent contractor in certain conditions (if some criteria are being met).
Issuing them a 1099 at the end of the year must be based on several factors that qualify a true independent contractor:
- The driver gets a percentage of the move, from the moving company
- The driver pays their helper
- The driver owns the truck, paying fuel and other expenses
- The driver can experience profit or loss
- The driver can accept or not accept a job offered by the moving company.
On the other hand, when a Lakewood moving company pays movers as W-3, employees are responsible for:
- Social security
- Medicare tax
- Withholding state income taxes as well as federal taxes
- Contributing to unemployment insurance fund
- Getting worker’s compensation