Legal Question in Business Law in Pennsylvania

Re: Employee or Sub Contractor?

Whether you call them subcontractors or not does not automatically make them such. A court may find them to be employees despite the fact that you call them subcontractors. Just something you need to be aware of.

However, if you get past that hurdle then it does not matter (for your business) if you pay them personally or to their business.

Re: Employee or Sub Contractor?

You asked about setting up a small business.

There are a lot of issues that go into whether a worker is a subcontractor or an employee. If an employer chooses to make a worker a subcontractor and chooses wrongly then the employer would be subject to substantial fines, penalties and liabilities.

Even large companies get this wrong and expose themselves to massive financial hits. Microsoft was faced with this same issue last decade. That case provided substantial guidance on when and when not to call an employee a subcontractor.

There are a number of alternatives for setting up employment and business relationships. The questions you ask are loaded with landmines that can blow up on the unwary. You really need to speak with a competent business lawyer and probably a CPA also. These professionals can help you make the best decisions for your business including minimizing potential liability and maximizing realized revenue.

I would be happy to speak with you about how to set up and structure the business.

Regards,

Roger