Legal Question in Employment Law in California

W2 or 1099?

I am starting a door to door sales business and will be hiring a team of sales people to go door to door selling my merchandise. These salesmen would be paid on commission only. Earlier I was advised that I'm one of the unusual cases that does not have to file payroll, instead I could simply file a 1099 (MISC I believe?)

Is this true? If so must i still withhold taxes (federal, state, etc)?

Thank you


Asked on 4/02/04, 12:54 pm

2 Answers from Attorneys
Donald Holben Donald R. Holben & Associates, APC

Re: W2 or 1099?

You may be in for a rude awakening. Many issues are raised in order to show that a person doing work for you is a contract employee and not regular employee. You need to look at all issues such as insurance, worker's comp, are you requiring certain hours, providing supplies and business cards, etc., etc. Call to discuss.

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Answered on 4/09/04, 11:38 am
Terry A. Nelson Nelson & Lawless

Re: W2 or 1099?

This is a question for a good tax consultant who is fully informed about the scope of the employees duties, etc. After determining what you actually have to do, you should have an attorney assist you in preparing appropriate employee handbook and forms to use. Only if they properly qualify as 'independant contractors' can you treat them as 1099 contractors instead of employees. Contact me if interested in reviewing your system and rules for compliance.

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Answered on 4/08/04, 3:08 pm


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