Potential Employees Wanting Cash Payments

[CHIEF 5075]

7 minutes ago, CooterBrown said:

Has anyone explained to these idiots that the business is still reporting employee pay, regardless of payment method, to the IRS as a business expense and they’re still on the books as an employee? They’re the one who’s going to get fucked in the end.

No, it is worse than that. They are expecting them to pad business operations and material expenses with bogus receipts and pay them in Benjamins. It takes some unmitigated gall.

They are starting to flood social media marketplaces, and are now competing with legitimate businesses, and will do the labor, if you supply the materials. If you are outside the city limits there isn't any code enforcement. 

CHIEF

[CooterBrown 18002]

11 minutes ago, CHIEF said:

No, it is worse than that. They are expecting them to pad business operations and material expenses with bogus receipts and pay them in Benjamins. It takes some unmitigated gall.

They are starting to flood social media marketplaces, and are now competing with legitimate businesses, and will do the labor, if you supply the materials. If you are outside the city limits there isn't any code enforcement. 

CHIEF

Ah, I get it now. They want to be treated like illegal migrant labor. Be careful what you wish for.

 

[CHIEF 5075]

1 minute ago, CooterBrown said:

Ah, I get it now. They want to be treated like illegal migrant labor. Be careful what you wish for.

 

It's their fucking business model. Draw unemployment benefits, get paid in cash, work when you feel like it.

CHIEF

[Nice Guy Eddie 13507]

I get no-snitching  but if someone is illegally under-cutting your business, an anonymous call to the TWC can start an investigation. And if there is a large company that is ultimately paying for the labor, like a major O&G, I also guarantee their HR, Legal and Compliance depts would be interested in hearing about cash payments under-the-table to contract labor.

Hopefully legit businesses don't enact a policy if you can't beat them, join them. 

Edited May 24, 2021 by Nice Guy Eddie

[justhookit 4191]

So what y’all are saying is my Whataburger with cheese and japs (no racist) is getting ready to cost 13 bucks.

[Nice Guy Eddie 13507]

4 minutes ago, justhookit said:

So what y’all are saying is my Whataburger with cheese and japs (no racist) is getting ready to cost 13 bucks.

There is another thread on it, but Whataburger has gone downhill lately in most locations. I assume the remaining locations will follow.

[jeevsie 3733]

On 5/22/2021 at 11:23 AM, Dr. Beeper said:

I can’t imagine owning a business reliant on these types of people. I can’t imagine why anyone would want to deal with this shit. 

Ah, you many not be a business that has to be reliant on these types of people.  But your business may rely on supply from a business that is reliant on these types of people.  Supply chain impacts us all...

[justhookit 4191]

So I’m having a tile backsplash put in my kitchen this morning. Ordered the tile through a large company and got a quote for installation thru them for 1200. Contacted a local guy directly who subcontracts for them and would have done this job. He’s doing it for 480.

[capnamerca 571]

1 minute ago, justhookit said:

So I’m having a tile backsplash put in my kitchen this morning. Ordered the tile through a large company and got a quote for installation thru them for 1200. Contacted a local guy directly who subcontracts for them and would have done this job. He’s doing it for 480.

Cash?

[justhookit 4191]

Wasn’t specified but I’m assuming I’m writing a check.

[Incredulity 11646]

I would assume that situation is more caused by mark-up from the tile vendor.  

 

Basically they really don't want to provide installation, but will provide a fuck you price for people who don't want to source both the tile and installation.

[justhookit 4191]

1 minute ago, Dr. Beeper said:

Assume you’re going to the ATM, because you are. And that is just fine. 

Seriously doubt it but yeah I’m fine with that.

My larger point though is I think a lot of people like me are fed up with handing the 700 dollar profit to a big company. On my house build last year I cut the middleman out of everything I could and saved a fortune. Down here on the coast at least I know a ton of people that have left their employer and gone into “business” on their own. They are making more money and I am saving money. As things return to normal I think we are in for a wild ride over the next year or two with prices. Anyway maybe that’s a discussion for the other thread.

 

 

[justhookit 4191]

15 minutes ago, Incredulity said:

I would assume that situation is more caused by mark-up from the tile vendor.  

 

Basically they really don't want to provide installation, but will provide a fuck you price for people who don't want to source both the tile and installation.

No they definitely want to do the installation as that’s where the big profit is. Quote for the tile was the same with or without installation. Lady was fucking pissed I didn’t use them for the install. This is after she;d done more than 20,000 in countertops for me earlier this year. They are counting on people being lazy and not wanting to source the install themselves.

[RDCanecutter 26378]

On 5/22/2021 at 10:41 PM, Sandman said:

My wife's company runs a bunch of bars and they just switched over to a cashless system. Now all of the bartenders don't want to come back to work because no cash means they won't get the same level of tips as before (or they can't fudge the numbers in the till).  They aren't making just 2.13/hr either. They've been scrambling to hire some bartenders from temp agencies to get by.

Did management talk to any workers before the switchover? Saying that none of the bartenders want to come back to work sounds like they got blindsided.

[RDCanecutter 26378]

27 minutes ago, justhookit said:

So I’m having a tile backsplash put in my kitchen this morning. Ordered the tile through a large company and got a quote for installation thru them for 1200. Contacted a local guy directly who subcontracts for them and would have done this job. He’s doing it for 480.

In the middle of shopping tree dudes right now. Amazing range of prices even from established companies, and I haven't even walked down the street and asked the Mexican roofers how much they'd do it for.

In addition, if you just ask, they'll drop prices a few hundred. It's as if we live in a country where most people don't know you can haggle.

[CHIEF 5075]

15 minutes ago, justhookit said:

Seriously doubt it but yeah I’m fine with that.

My larger point though is I think a lot of people like me are fed up with handing the 700 dollar profit to a big company. On my house build last year I cut the middleman out of everything I could and saved a fortune. Down here on the coast at least I know a ton of people that have left their employer and gone into “business” on their own. They are making more money and I am saving money. As things return to normal I think we are in for a wild ride over the next year or two with prices. Anyway maybe that’s a discussion for the other thread.

 

 

I agree. But I think we are looking at a new business model developing. There will be a decline in full service businesses that offer materials, installation, servicing, and warranty. It's going to be up to the consumer to source those on their own. You can't blame consumers for wanting to get the best price, and you can't blame the labor for wanting to make as much as possible, especially if they aren't receiving benefits through the company. They get a 1099 at the end of the year anyway. It will finally be the end of the Mom and Pop businesses.

My main concern is what is this doing to our tax base with so much cash under the table, and the ability to hide cash and draw unemployment benefits.

CHIEF

[RDCanecutter 26378]

19 minutes ago, CHIEF said:

My main concern is what is this doing to our tax base with so much cash under the table, and the ability to hide cash and draw unemployment benefits.

We'll turn into France if we are lucky, Italy if we are not.

[justhookit 4191]

24 minutes ago, CHIEF said:

I agree. But I think we are looking at a new business model developing. There will be a decline in full service businesses that offer materials, installation, servicing, and warranty. It's going to be up to the consumer to source those on their own. You can't blame consumers for wanting to get the best price, and you can't blame the labor for wanting to make as much as possible, especially if they aren't receiving benefits through the company. They get a 1099 at the end of the year anyway. It will finally be the end of the Mom and Pop businesses.

My main concern is what is this doing to our tax base with so much cash under the table, and the ability to hide cash and draw unemployment benefits.

CHIEF

That’s pretty much where I was going with the whole thought. It might have already been coming and COVID accelerated the change, but the economic landscape seems to be fundamentally altered. See this thread, the inflation thread, the real estate threads, and the understaffed restaurants thread. Strange times for sure.

[Nice Guy Eddie 13507]

1 hour ago, CHIEF said:

I agree. But I think we are looking at a new business model developing. There will be a decline in full service businesses that offer materials, installation, servicing, and warranty. It's going to be up to the consumer to source those on their own. You can't blame consumers for wanting to get the best price, and you can't blame the labor for wanting to make as much as possible, especially if they aren't receiving benefits through the company. They get a 1099 at the end of the year anyway. It will finally be the end of the Mom and Pop businesses.

My main concern is what is this doing to our tax base with so much cash under the table, and the ability to hide cash and draw unemployment benefits.

CHIEF

IMHO, the double dipping is definitely the worst part. The govt and tax-payers are subsiding whatever work these workers are doing.  And it allows these workers to undercut legit businesses that are following the rules.

[Sandman 3403]

1 hour ago, RDCanecutter said:

Did management talk to any workers before the switchover? Saying that none of the bartenders want to come back to work sounds like they got blindsided.

From what I can recall, they were all furloughed last year, as the venues were closed due to covid. During this time, they decided to switch to a cashless system, presumably to avoid touching cash and potentially getting infected. Could the bigwigs have also wanted to stop any skimming from the till? I imagine so but covid was the reason they gave to the employees. So far, it's not going well.

[deadshank 24652]

1 hour ago, CHIEF said:

I agree. But I think we are looking at a new business model developing. There will be a decline in full service businesses that offer materials, installation, servicing, and warranty. It's going to be up to the consumer to source those on their own. You can't blame consumers for wanting to get the best price, and you can't blame the labor for wanting to make as much as possible, especially if they aren't receiving benefits through the company. They get a 1099 at the end of the year anyway. It will finally be the end of the Mom and Pop businesses.

My main concern is what is this doing to our tax base with so much cash under the table, and the ability to hide cash and draw unemployment benefits.

CHIEF

The IRS does not like 1099 contractor wage reporting, especially in the construction business.  The 1099-misc form has been moved aside and the 1099-NEC form is now back in vogue (after getting mothballed before the 1983 tax year) so non-employee compensation can be more effectively tracked. Too many fraudulent transactions and bogus TINs caused tax collection to go down and collection expense to go up.  Hard for Uncle Sam to get his cut and I don't blame him.

The IRS does like W-2 employees becuase it is much easier to account for and get withholding and FICA dollars that way as the employer will (should) keep better books and provide better reporting that the average 1099 contractor.  Redundant reporting to state and, sometimes, local tax agencies makes payors (businesses) keep their books tight, as well; and where 99% of individual 1099 contractors are completely incapable and / or to dumb and lazy to do it.

 

[jimmyjazz 45880]

It's not unusual, but I pay my buddy who is a good mechanic to work on our cars at our house.  He does it for $50/hr.  It's more than he makes at the shop, and it's well less than I'd pay the shop.

I pay cash, I assume he doesn't report.  I sure don't.  I eagerly await my official visit.

[Nice Guy Eddie 13507]

13 minutes ago, deadshank said:

The IRS does not like 1099 contractor wage reporting, especially in the construction business.  The 1099-misc form has been moved aside and the 1099-NEC form is now back in vogue (after getting mothballed before the 1983 tax year) so non-employee compensation can be more effectively tracked. Too many fraudulent transactions and bogus TINs caused tax collection to go down and collection expense to go up.  Hard for Uncle Sam to get his cut and I don't blame him.

The IRS does like W-2 employees becuase it is much easier to account for and get withholding and FICA dollars that way as the employer will (should) keep better books and provide better reporting that the average 1099 contractor.  Redundant reporting to state and, sometimes, local tax agencies makes payors (businesses) keep their books tight, as well; and where 99% of individual 1099 contractors are completely incapable and / or to dumb and lazy to do it.

 

when I was in O&G about a decade ago, there was a major push by Big Oil to eliminate 1099 contractors. They were moving to payrolling companies that would "hire" the previous 1099 contractors as W-2, for a relatively small cut. The 1099 contractors actually received a raise to offset the fee.  The main reason for this switch was that some contractors were failing to pay taxes and the IRS was looking to Big Oil to also pay the taxes since why not go after the party with the deepest pockets. 

Anyway the 1099 contractors did not like the change and several left because of it. They weren't missed.

[deadshank 24652]

15 minutes ago, jimmyjazz said:

It's not unusual, but I pay my buddy who is a good mechanic to work on our cars at our house.  He does it for $50/hr.  It's more than he makes at the shop, and it's well less than I'd pay the shop.

I pay cash, I assume he doesn't report.  I sure don't.  I eagerly await my official visit.

Do you get a choice of gulags to spend the rest of your time on this earth?

[deadshank 24652]

12 minutes ago, Nice Guy Eddie said:

when I was in O&G about a decade ago, there was a major push by Big Oil to eliminate 1099 contractors. They were moving to payrolling companies that would "hire" the previous 1099 contractors as W-2, for a relatively small cut. The 1099 contractors actually received a raise to offset the fee.  The main reason for this switch was that some contractors were failing to pay taxes and the IRS was looking to Big Oil to also pay the taxes since why not go after the party with the deepest pockets. 

Anyway the 1099 contractors did not like the change and several left because of it. They weren't missed.

Yep. 

[shnsajax 3591]

In Boise and really all of Idaho we are currently at Pre-Pandemic unemployment levels (right around 3.0%) and the overall workforce has increased over the past 14 months. At this point all I can do is laugh at the businesses complaining that there is a labor problem especially when we have well known small businesses that charge a premium product and still trying to pay less than fastfood. Oh and housing values have increased by about 33% over the past 12 months as well with the median price at $465,000. 

[Trey3216 15343]

27 minutes ago, jimmyjazz said:

It's not unusual, but I pay my buddy who is a good mechanic to work on our cars at our house.  He does it for $50/hr.  It's more than he makes at the shop, and it's well less than I'd pay the shop.

I pay cash, I assume he doesn't report.  I sure don't.  I eagerly await my official visit.

I have the same arrangement with a good friend of mine.  Pay about the same rate you are.  I go buy the parts, he fixes it and brings me the car back.   

[jimmyjazz 45880]

6 minutes ago, Trey3216 said:

I have the same arrangement with a good friend of mine.  Pay about the same rate you are.  I go buy the parts, he fixes it and brings me the car back.   

Yeah, I can get the parts cheaper than what the shop charges, too.  Some things don't work (i.e., need a lift), but brakes, minor engine work, etc. I see no good reason not to have him do it.

This brings up a question:  is there any "legal" requirement for sending 1099 forms to guys like that?  What about lawn services, etc.?  A legit service obviously has to report their income, but I'm sure not doing it on the other end.  That said, when I do engineering consulting for small companies, they send me a 1099 and I file.  Maybe the lawn service corporation is the differentiator -- I don't have to send a 1099 to a corporation.

I will not be losing sleep over this.

[Nice Guy Eddie 13507]

25 minutes ago, jimmyjazz said:

Yeah, I can get the parts cheaper than what the shop charges, too.  Some things don't work (i.e., need a lift), but brakes, minor engine work, etc. I see no good reason not to have him do it.

This brings up a question:  is there any "legal" requirement for sending 1099 forms to guys like that?  What about lawn services, etc.?  A legit service obviously has to report their income, but I'm sure not doing it on the other end.  That said, when I do engineering consulting for small companies, they send me a 1099 and I file.  Maybe the lawn service corporation is the differentiator -- I don't have to send a 1099 to a corporation.

I will not be losing sleep over this.

I believe that you're supposed to generate a 1099 for anyone that you're hiring as a contractor and you pay them over $600 per year. You hire a cleaning service, you don't issue a 1099. Hire an individual, send them a 1099. But my guess is that few do this.

[RDCanecutter 26378]

1 hour ago, jimmyjazz said:

I pay cash, I assume he doesn't report.  I sure don't.  I eagerly await my official visit.

You were in the clear, until you made this post.

[Chewbacca 7766]

That's what the business owners, I know, are saying. It's theft. I have no employees, but these business owners are months behind. It would be long term employment. It's definitely not worth going to jail over, and tax evasion usually incurs that kind of wrath from the IRS.
CHIEF

Payroll taxes are not too be trifled with. They will come after you personally for that.

[deadshank 24652]

I was in a meeting yesterday with a guy that is building a new house.  He wants my roofing company to install a really nice clay tile roof, flash all the stuff that needs it, etc.  

This guy is a Mexican immigrant wood floor contractor that does ultra high-end, turnkey work.  I mean really nice stuff and his company is used by many of the high-end builders in Houston.  He’s about 40ish, smart as hell and has a great facility for his shop.  He’s no dummy. 
 

Speaking to him and the framer (also Mexican descent) about build issues they both went off on a 10 minute tangent about lack of manpower, losing people to government assistance and the new child tax credit.  And, the framer has an employee that announced he will only take his pay in cash, off the books with no withholding or tax reporting to the IRS   

They were both of the opinion that our government doesn’t want people to work.  Remember: their frustrated opinion.   Not mine.   
 

Just an interesting perspective from  source other than the typical white guy business owner.  

Edited July 16, 2021 by deadshank

[CHIEF 5075]

My mother moved into a patio home, the front yard was river rock, and she constantly had a weed problem. She is covering the front yard in Oklahoma Flagstone. The undocumented rock masons are $275/day each, paid in cash, every other day. They are really good, work outside all day in the heat. I see why they can get that.

CHIEF

[Nice Guy Eddie 13507]

The recent stimulus packages are effectively universal basic income with per-child extras and capped at income levels.

I'm staying away from the reasons why this is the policy or whether it's right or wrong. Those belong in CR.

For the foreseeable future we may see that some people may receive enough govt benefits to sit on their ass. Others may realize that they can double dip by working. It's fair to say that if you're in business that requires some workers to earn less than $15/hr, you should look for an exit. 

I understand that a business owners may not like these changes but you have to face external pressures.