First, why do you care about whether your help is a sub or an employee? Because you can push the tax burden onto the contractor rather than deal with payroll and you can avoid having to pay workers compensation insurance on those contractors, Or can you?
In a nutshell, here is what the state says:
In New Hampshire, the party you are HIRING is a subcontractor and NOT an employee if ALL of the following are TRUE:
- The hired party possesses or has applied for a federal employer identification number or social security number
- The hired party has control and discretion over the means and manner of performance of the work
- The hired party has control over the time when the work is performed and the time of performance is not dictated by the employer. However, this shall not prohibit the employer from reaching an agreement with the person as to completion schedule, range of work hours, and maximum number of work hours to be provided, and in the case of entertainment, the time such entertainment is to be presented.
- The hired party hires and pays the person’s assistants, if any, and to the extent such assistants are employees, supervises the details of the assistants’ work.
- The hired party holds himself or herself out to be in business for themself or is registered with the state as a business and the person has continuing or recurring business liabilities or obligations.
- The hired party is responsible for satisfactory completion of work and may be held contractually responsible for failure to complete the work, AND
- The hired party is not required to work exclusively for the employer.
Are you confident the people you are hiring qualify as Independent Contractors? We deal with issues like this all the time and can give you some really good advice on how to survive a challenge. Let us help you get confidence today.
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Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in keeping his clients OnTrack with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve’s exclusive SIX Step system developed for small businesses at www.appletreebusiness.com/map.