[knessinger]

We are having about 50 temporary employees come in for about 5 hours of work each on one day. Can we pay them cash and not take have taxes taken out? The amount each temp employee would be getting is only $75.00. Can someone help if they know the answer and where did you find the answer?

[Robin Holtson]

The bottom line is you want to protect your company. So, the best thing to do is issue a check for the time worked (you don't need to take out taxes), and then issue each temp employee a 1099 at the end of the year. You don't want the IRS or Dept. of Labor knocking on your door. Also, make sure you have them fill out an I-9 (Employment Eligibilty Form) to confirm they are legally eligible to work in the U.S. Go online to either the U.S. Dept of Labor or your state's DOL web site to confirm, or check with your company's attorney.

[AngHammers]

As an employer in the State of Indiana and as a result of a recent audit conducted by the Indiana Department of Workforce Development, I discovered that you CAN'T pay all temporary employees as cash jobs and issue a 1099 at the end of the year. The auditor provided me with the following information to help me in determining when the individual is eligible for a 1099.

"For payments to individuals for services that you believe should not be considered employees, you must provide proof that they are independent. Indiana Code IC-22-4-8-1 defines “employment” as services performed for remuneration by an individual unless and until all the following conditions are shown to the satisfaction of the department
A. Free from control and direction in connection with the performance of such service…AND
B. The service is performed outside the usual course of your business…AND
C. The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed; or is a sales agent paid solely by commission and is the master of their own time and effort

Items that may indicate that the payee is customarily engaged in an independently established occupation, profession, or business include: Invoice from the payee for the services provided, business card from the payee, federal identification number of the payee, a business promotional item, a business phone listing, certificate of insurance, liability bond, license, or a copy of the payee’s business tax return, such as schedule C."

I strongly recommend contacting your local DWD or DOL office for clarification.