The Newfarm Forums

[evensongfarm]

Hi there, we have a small market garden. It is large enough that I would like to have help a few days a week with picking and other small chores. What kind of set up can I have? Because we are a business I am worried about hiring anyone because of all the paperwork that I think would be involved. I have heard about hiring people as "contractors." How does this work?

When you hire in home help (babysitters, cleaners, etc) you don't have to have any paperwork if they make less than $1000 a year (I think). But since we are (trying to) make a profit I don't know if this exemption will hold. Also, do you have to have special liability insurance?

Trying to stay legal can be very trying.......

[AndyF]

If you want to be truly legal and minimize your paperwork hire your contractors through a temp agency. The temp agency is the employer and will bill you for the labor with about a 50% mark-up on the worker's hourly rate.

Alternatively, you can check the IRS website for their checklist on determining if a worker is an employee or contractor. If you provide tools and set the schedule they will usually be considered to be employees. But it might be possible to arrange the work that you hire out so that you do pass the tests for treating the people who do the work as contractors. If you do treat them as contractors you may have to provide a 1099 at the end of the year. The IRS website or your accountant can tell you whether this needs to be done.

[muzzelloader]

Perhaps you might consider High Schoolers as part time help during the summer months. This used to be commen in my part of the country untill the big farmers and food packers started hireing Illegal Alens. Be verey careful of so called labor contractors many of them are deep in to the Illegal Alens racket. I beleve however that such cos. as Manpower avoid this sort of thing and take care of most of the Gov. paperwork for you. Of course it is a bit of a problem training part timers in proper methods of grower work. Be sue and let us know how you manage this in the future. Allso heres wishing you good luck in your venture.

[Glacial Acres]

We had our first hired help on the farm today, so we are very new to the whole business, too.
A few days ago I started searching for help handling taxes, paperwork, minimum age requirements, etc.
On www.irs.gov/publications/p51/ar02.html I found some of what I was looking for. Publication 51 is an Agricultural Employer's Guide. It helped me classifiy that we do, indeed, have employees.

Under section 2. Who are employees? It reads:
In general, you are an employer of farmworkers if your employees:
Raise or handle agricultural or horticultural products on your farm.
Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment,
Handle, process, or package and agricultural or horticultural commoditly if you have produced over half the commodty...
Do work for you related to cotton ginning, turpentine, or gum resiin products.

Share farmers and alien workers admitted under section 101... or "H-2(A)"visa workers seem to be exempt from farmers having to withhold or pay social security and medicare taxes.

We had our workers today fill out W-4 forms. They brought their SSN's, so I guess that means they are here legally? Right? I just noticed there is an 800 number to verify SSNs: 1-800-772-6270 for up to 5 names and numbers. To verify up to 50 names and numbers contact your local SS office.
There is a 150/2500 rule that I don't have before me, but it says that if each employee is paid under 150.00 AND the total of all workers paid is less than 2500.00, then there is no need to file. Please don't take my word for that with out checking the publication, first, though!

Blessings of health and prosperity to all the little farms out there!

[Beth]

Hello Even Song Farm, may I suggest posting an ad with Organic Volunteers. com. I have searched and inquired about several positions with this organization. Another suggestions is searching the internet for WOOFER, another organization that does the same thing.

Good Luck!
Sincerely.
Beth

[evensongfarm]

Hi there,

So I contacted my accountant (never thought I would say that--sounds so....buisnesslike!!) and he told me that if they are a "contractor" and make less than $600 a year the only record I have to keep is how much I paid them. If they make more than $600 then I would need a SS#, full name and an address. To be a contractor and not an employee they need to make their own schedule (you can say that you need them cut and wash lettuce in the morning and pick beans after the dew has dried, etc)

I ended up hiring two girls who live right down the street. I decided on paying them a good hourly rate ($7) because of my desire to place a high value on their help. If they can't work up to the level I need I can really emphasize that they are making good money for young teens. I figure if they see that I value them they will value me and my garden.

You never know, I may end up not being able to continue with this hourly rate but I will try! My only fear is that they will get really good and I will end up having to give raises!!!! :o)

[Terry W]

umm, after 10 years in the tax field--the 600 dollar amount before issueing a 1099 is dangerous! if one is paying the help in cash, how does one prove all 3,000 bucks paid out in "casual labor" didnt go to one person? Granted, keeping payroll may seem difficult, but the headaches about proving where money went are a lot smaller. I would go ahead and 1099 anyone that I paid more than 100 dollars to. Creates a paper trail that can verify expenses with much more readily. my brother issues 1099 for his welding bnusiness, then pays the income taxes for the "contracted employees" ( which, in the long run means he is actually paying out more in matching SS and hourly wages than he thinks!)But that way, he is avoiding the quartly filing of W-2 information and deposits to SS and IRS.

[singingpigfarm]

I bring in workers from farm/forest labor contractors. It is the same idea as using a temp agency, except that farm/forest labor contractors specialize in agriculture/nursery/forestry. This ensures that you will get the right people matched to your needs.

I use them for the following reasons:

1) In my state ,Oregon, they must all be licensed through the state Bureau of Labor and Industries. Their website has a complete list of all licensed contractors with addresses, contacts, phone numbers. It also has a list of contractors either on probation or banned from doing business.

2)I only need to bring them in on an as needed basis. I don't have an employee that I need to find a certain amount of hours for each week.

3) The labor contractor carries the workers' comp insurance, covers all payroll related tax filings, verifies immigration status. I just write one check to the contractor and it is just a simple expense item. No witholdings, no filings etc.

4)The contractors provide portapotties with hand washing stations, drinding water, tools and a foreman. I only need to communicate my needs to the formean and he ensures that the work gets done. If someone isn't working up to my standards, I just tell the contractor don't send them again. If they are really bad, I call the contractor and tell them to come pick the bad workers up/ That really gets the attention of the others.

My cost is $12/hour/person. That is reasonable considering that Oregon has the 2nd highest minimum wage in the country at $7.45/hour. A good rule of thumb is that a worker on your payroll is going to cost 33% more than their base wage after you pay 1/2 of their FICA, workers' comp insurance, unemployment insurance, and pay someone or a service to manage the payroll. That puts the actual cost of a $7.45/hr person at just under $10/hour. The contractor is making $2/hour gross profit on the deal, and to me that is a bargain for what they provide.

[Finkster]

Is there anybody out there looking for part time farm help?