Cohousing-L Mailing List: Re: Re: paying babysitters and liability

[David Mandel (dlmandel]

This is very risky advice. Saying someone is an independent contractor
doesn't make it so. If the work relationship exhibits characteristics of
employer-employee, then you could be liable for all these things that Sue is
saying you can avoid, and you could also be in trouble.
The main factor is control over when and how the work is to be done. Other
significant indications are the manner of pay (hourly or daily, etc., vs. a
single lump sum for a contracted job); who supplies the tools and materials;
level of expertise required; supervision.
For a more extensive discussion in lay language, look at www.nolo.com,
specifically a number of articles listed at
http://www.nolo.com/lawcenter/index.cfm/catID/EC0EEB1C-16EA-4F81-833ED5890B19383A/subcatid/0D973BC0-3287-4CA1-944DC75DE82DC59F
David Mandel

----- Original Message ----- 
From: "Sue Pniewski" <SPniewski [at] Habijax.com>
To: <cohousing-l [at] cohousing.org>
Sent: Monday, September 15, 2003 6:48 AM
Subject: RE: [C-L]_Re: paying babysitters and liability


>
> I would suggest if you are to employ anybody as a cash employee, you
should
> have them fill out the required I-9 and W-4 and then at the end of the
year
> report on a 1099.  Then you would not be expected to pay any employer
taxes,
> the employee would be required to sort all of that out themselves.  But,
to
> their benefit, they can then deduct a ton of expenses making the payment
and
> taxable amount negligible.  YOu should have a stock agreement to use with
> everybody that states in clear terms that they are an independent
> contractor, they are responsible for all injuries, they are responsible
for
> all their errors and omissions, and taxes, and they you provide no
insurance
> coverage for them.  It should also say they agree to indemnify you for any
> and all legal bills incurred as a result of their employment with your
> group.  Then they will have little leg to stand on in the case of an
injury,
> no attorney will take that kind of case without a fat retainer up front,
> which few people will be willing to part with, and they will still lose in
> the end.  You protect yourselves that way from the IRS, liability, and
from
> misunderstandings.  I have a form that could be modified to suit your
needs,
> I'd be happy to share.
>
>
> -------------------------------------
> Susan Pniewski, Esq.
> General Counsel
> Habitat for Humanity of Jacksonville
> 904.798.2712  x202
>
> 'If you advance confidently in the direction of your dreams; and
> live the life which you have imagined, you will meet with a success
> unmatched in common hours...
> If you have built castles in the air, your work need not be lost;
> for that is where they should be.
> Now put the foundations under them.'
> -Henry David Thoreau
>
>
>
> -----Original Message-----
> From: Lynn Nadeau [mailto:welcome [at] olympus.net]
> Sent: Monday, September 15, 2003 2:24 AM
> To: cohousing L
> Subject: [C-L]_Re: paying babysitters and liability
>
>
>
> >The worst that can happen in any case is that you have a tax audit and
pay
> a
> >fine or back taxes.
> Lynn here. I didn't make our concern clear. We are not worried about
> "nanny" laws or unpaid taxes, but about liability suits in the case of
> injury. Sitter breaks his back while subduing freaked out child, or is
> tripped by a chair in the kid room, etc. If he were simply a visitor
> wandering through RoseWind, and broke his leg in a hole on the commons,
> it would be paid by our general liability coverage. But such coverage is
> void if the person is there for pay.
>
> The bad experience we had was with a fellow who was doing a leftover job
> at the end of our common-house construction. This once, we didn't go the
> cautious route and hire him through the co-op which dealt with his Social
> Security, workman's comp premiums, etc. Instead we paid him cash, with
> the implicit understanding that either he'd pay his own insurance, or
> take the risk of not having any in place. He fell off a ladder (never
> even alleging any negligence on our part) and the long story that ensued
> cost us many many person hours and thousands of dollars  in legal
> counsel, without it ever even going to a lawsuit. We ended up in trouble
> with L&I and the IRS, with back payments and penalties, but mainly we
> were scared we might get sued by him for all sorts of damages: at one
> point we heard the possible figure of $400,000!
>
> It seems unlikely that a babysitter would get hurt and sue us for it, but
> the above scenario also seemed unlikely, given that the fellow was a
> friend and seemed very laid-back. Then they talk to their spouse or
> neighbor and it's whiplash and mental anguish and lost pay and who knows
> what else.
>
> As for having a separate "club" account, we do something like that for
> our meal accounting,  but it's easy to show that that money really does
> stay in a closed loop for food purchases. If we use the "club" account to
> hide the fact that we are paying a sitter, any insurance investigator
> worth her salary could figure that out. Even from our emails discussing
> how to avoid the liability!
>
> Lynn Nadeau, RoseWind Cohousing
> Port Townsend Washington (Victorian seaport, music, art, nature)
> http://www.rosewind.org
> http://www.ptguide.com
> http://www.ptforpeace.info (very active peace movement here- see our
> photo)
>
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