one employee in two payroll groups

[AlanM]

I'm setting up employees in groups: one is salaried and paid semi-monthly, the other is fee for service (e.g. $$ for each lawn mowing, $$ for snow removal) and paid as needed. I have one person who is in both Groups. How do I handle that? I was planning to set them up in the Semi-Monthly Group and then modify their data to Ad Hoc and a different income item, make the payment, then modify them back to semi-monthly with salaried item. Will that impact W2s? Thanks.

[NeilZ]

I'm setting up employees in groups: one is salaried and paid semi-monthly, the other is fee for service (e.g. $$ for each lawn mowing, $$ for snow removal) and paid as needed. I have one person who is in both Groups. How do I handle that? I was planning to set them up in the Semi-Monthly Group and then modify their data to Ad Hoc and a different income item, make the payment, then modify them back to semi-monthly with salaried item. Will that impact W2s? Thanks.

Do you take out taxes when the person is doing 'fee for service' ?? Or in reality, is he behaving more like a contractor in this instance, than as an employee ??

If its the former, then there may be no need to put him in another group. Just create a few new income pay items for the employee. Make them an hourly type of income, and only enter 'hours' when he performs the work. For instance, he does the show removal and each time you pay $25.00. So over a two week period, he cleared snow 3 times. When processing payroll, you would check the box that says "Suppress specific items ... to allow you to select (or not) those extra income pay items. When you get the process payroll screen that asks you for the number of 'hours' you would enter 3, for 3 snow removals.

The employee would then get one check, covering all his income for the two weeks (salary and fee-for-service) and have taxes taken out. However, this does mean that you would also pay additional employer taxes on SS and Medicare. As far as the W-2s, doesn't matter, if its all taxable income it'll get put in the proper locations on the form.

However, if he's more like a contractor, and you're not going to pay the employer taxes, then he's a 1099 contractor, and should be paid through Accounts Payable.

[AlanM]

Thanks for the quick response. It makes sense to me.

We are currently struggling with the contractor vs employee distinction. In the past, all workers except pastors and secretary have been treated like contractors. In this DOL document https://www.dol.gov/whd/workers/Misclas ... 2015_1.pdf , there are five criteria used to judge if a worker is an employee or contractor: (A) the extent to which the work performed is an integral part of the employer’s business; (B) the worker’s opportunity for profit or loss depending on his or her managerial skill; (C) the extent of the relative investments of the employer and the worker; (D) whether the work performed requires special skills and initiative; (E) the permanency of the relationship; and (F) the degree of control exercised or retained by the employer. As best as I can figure, the worker is an employee unless he/she operates an independent business. E.g. if we have some clean the church, they are an employee; if we have a person who owns a cleaning service do the exact same tasks, they are a contractor.

Thanks again.

[NeilZ]

Thanks for the quick response. It makes sense to me.

We are currently struggling with the contractor vs employee distinction. In the past, all workers except pastors and secretary have been treated like contractors. In this DOL document https://www.dol.gov/whd/workers/Misclas ... 2015_1.pdf , there are five criteria used to judge if a worker is an employee or contractor: (A) the extent to which the work performed is an integral part of the employer’s business; (B) the worker’s opportunity for profit or loss depending on his or her managerial skill; (C) the extent of the relative investments of the employer and the worker; (D) whether the work performed requires special skills and initiative; (E) the permanency of the relationship; and (F) the degree of control exercised or retained by the employer. As best as I can figure, the worker is an employee unless he/she operates an independent business. E.g. if we have some clean the church, they are an employee; if we have a person who owns a cleaning service do the exact same tasks, they are a contractor.

Thanks again.

That's the basic criteria ... so go with the additional income pay items, and process them as needed.