The Truth about 1099s and Tower Climbers

Discussion in 'Wireless Estimator Site Discussions' started by AntiGravityDevice, Jun 1, 2013.

  1. AntiGravityDevice

    AntiGravityDevice First Time Poster

    Hey Wireless Community,

    Long time listener, first time caller.

    So lately I've been running into a lot of these 1099 gigs. We all know they have their taboos, but I wanted to ask the community about the specifics.

    Please take this opportunity to share what knowledge you have regarding this aspect of tower related work, because it seems clear this tax loophole operates very differently in this industry than in others.
    Plus, information about 1099s and those giant steel money-trees is pretty scarce, and usually buried under loads of bullshit.

    I think we all know that signing rookies onto a 1099 is usually a recipe for disaster, but how has it fared for more experienced climbers and their respective companies?

    Specifically, what are the risks and benefits involved?
    What are the liabilities associated with it?

    What should you expect from a 1099 "employer/employee" situation?
    (There is legal jargon associated with this, but we all get the idea).

    How to prepare for a 1099 gig?
    Best ways to optimize a 1099 opportunity?

    What is the usual/competitive pay rate for climbers/leads/foremen if on a 1099?

    Also, feel free to add your own questions.
    As I said, there seems to be scarce resources on this question, so let's make some!

    Thank you, and I will be eagerly awaiting any responses.

  2. chevydmax04

    chevydmax04 Friend of the Community

    First problem you have to put away for taxes, and it won't be just the 20-30%, talk to an accountant and you will find that when you pay all the taxes you will be in the 40% bracket.

    There is a reason the employer wants you on 1099. Also workmans comp ins, if you 1099 and get hurt on a job site your SOL if you don't have your own Workmans Comp policy!

    And by the way have you ever priced WC Insurance? The annual premium is based upon how much you make annually. And tower work is risk rated 2nd only to roofing, if you want WC Ins you can make a claim against should the need ever arise, expect to pay roughly $22.00 of premium for every $100 of income (pre tax).

    Yes 22%! And that is entirely dependent upon your agent finding a company that will pick up the risk, that is why when a tower contractor has an accident they are done! No Ins company will pick up their WC if there is an accident on their record. There is a reason the employer wants you on 1099.

    Also if you are working as a 1099 contractor, the law states that you must do contract work for more than 1 GC, otherwise your an employee of that company.

    Also if you are working for the same hourly or daily rate on every job, or using the GC's tools and not your own, or your getting Per Diem, someone else is paying your hotel bills, or someone other than you is determining your work schedule/hours/vacation, you cannot be a 1099, because your an employee.

    The employer runs the risk if you get audited and the auditor determines that you do not qualify as a LLC or 1099 employee, the state can go back after the employer for all owed payroll and FICA taxes and penalties.

    I have 8 guys that work for me, I looked into the 1099 thing and it was a great deal for me, however in the long run I was screwing the guys I depend on everyday to bust ass and make me money. Don't buy the line of BS being fed to you, do yourself a favor and find someone else to work for.
  3. Stephen M Crabtree

    Stephen M Crabtree First Time Poster

    I thought about doing this also but like the guy above I agree with him I have been doing this for about 4 years and it seems that alot people are doing this. I had a great friend who drowned in taxes with this situation and paying your guys would be little to nothing and I believe my guy up top is worth more than a measly 15 hour which is a number I just threw out there. I want to start my own small Tiger team business but im finding that hard my self I left a company I have been with for ever as they where once a friend base get to know you do anything for you company to a I dont care and cant keep a promise company but thats the industry now to some point. Like the guy above find a company without that hassle as im looking also.
  4. dking

    dking Industry Observer

    Actually If I hired you as a independent contractor and I do not request a COLI from you, You can make a claim against my workers comp. I used to work for a company that exclusively used 1099s, and they got whacked hard during a audit (80+ 1099s).

    not necessarily, they cannot control when and how you decide to work, there is a test. your example below is a fantastic example of failing that test

  5. KLB Welding

    KLB Welding Industry Observer

    In Tennessee they used to do that 1099 thing in construction a lot! They were hiring people as "subs", sending them a 1099 then taking care of everything, tools, equipment, materials and so on. Tennessee changed the law and it is something along the line that if you supply tools, material, equipment, set schedules for the person then they are not subcontractors but employees. I've heard guys from other states repeat the exact same thing. This is done in order to get out from under paying employee payroll taxes. Which is understandable. I hired a guy for 4 weeks and another for 2 weeks and paid over $1100 dollars in payroll and unemployment taxes! First time I hired guys and realized I needed to charge way more per hour in order to make in profitable on my end.

    Getting a 1099 you'll need to pack away the tax money, you may have to file quarterly depending on your earnings. This means SSN and all the other goodies. I think I have been told that the 1099 thing is a grey area. It's not supposed to be done but it gets done. It saves the employer a ton in taxes as explained above.

    Workers compensation, according to my agent if I hire a guy on a 1099 for part time work he is still covered by my workers compensation as he is working for my company. I will get audited and will have to show the hours they worked. I do contract work for large outfits and I can't get workers compensation for myself because you can't sue yourself. On jobs where I am a subcontractor I fall under their workers compensation. I did work for a mechanical company and at the end of the job they said it cost them X amount of dollars to pay for my workers compensation. Never had that happen before or has it happened again but you will be covered by workers compensation.

    Find a good accountant and discuss it with them.

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