Hi... Ive started a small business.. I was under the WRONG impression I could 1099 my 2 guys as casual labor... That didn't work out so well! I have recently fired one such person for insubordination,unexcused absences and being late repeatedly. So he goes to the unemployment office and signs right up. Well the tax division of such office gives me a ring, informs me that the 12 month or 1000 hour rule does not apply to S.C. residents and that he would be considered an employee. So on to my question... How would I go about collecting that employees 8.5 percent taxes on his total earned wages for the year when he left on NOT good terms. Or am I stuck footing the bill having learned a costly mistake?

Please help

Andrew

You are basically stuck, also remember that you have unemployment tax to pay on employees that come out of your pocket, you have to pay a portion of all of their social security taxes, nornally they pay 7.5 percent and you pay the other 7.5 percent out of your pocket, as employees they are covered under workers comp, so you will need insurance for that.

Also you needed an attorney, since a 1099 employee can work various hours, it depends on there relationship with you, if they control the hours work, or if they are self employed and merely sub contract to you. There are people who would appear to be a full time employee but because of the contractial relationship with a written contract can be and stay a 1099 employee. Sounds like you need a trip to a labor attorney for more lessons.

I thought if you were fired you didn't get unemployment?