California Requirements for Employees

[jlkx]

Hi All,

Just found this sub and think it is amazing. I own a small commercial cleaning business and have recently hired my first employee, but I am paying her under the table. Starting in 2020 I am going to brining her on the books and will need to get her set up with payroll and things like that. I am curious if anyone has any advice on what other requirements I must provide as an employer in the state of California? I am going to be upping my insurance to cover her and will have her fill out a W-2 so she becomes an employee, but other than that I am not sure what (if anything) else is needed. I haven't been able to find anything online about this.

Any advice would be much appreciated!

Also, if anyone has any questions on starting a cleaning buiness as a side hustle, send them my way. Just finishing my 2nd year doing it. First year and a half was on my own cleaning two offices twice a week. Now I have hired a new employee and have her cleaning all the offices. Up to 6 total repeat clients now, and looking to put a lot into marketing in 2020.

 

[613jono]

@jlkx You should probably hire a payroll company to advise you on that, California probably passes a new labor law every month

 

[jlkx]

@613jono Good call. Planning on getting on with one here in the next couple weeks.

 

[enaga]

@jlkx You need to file a notice with the FTB, among other things. You also need to set up a payroll tax account with the IRS and the FTB. This is all stuff that your payroll company handles for you, if you use one. So take /@love2travel's advice and get a payroll company!

 

[jlkx]

@enaga Much appreciated! Do you use a payroll company or have any recommendations? I saw some online such as Gusto. Wasn't sure if it is best to find someone that is local though?

 

[enaga]

@jlkx I personally use Gusto. It's probably less expensive than anyone local you will be able to find. I don't know how the pricing or service compares to the other big ones like Paychex or ADP. I'm happy with Gusto.

 

[michaelenicks]

@jlkx Forget the employee nonsense . A chick I dated work for a commercial cleaning company in management. They set up every one who worked for them as subcontractors. So instead of having employees they would have people set up their own business bank account and run their own business. They would just feed them jobs . I saw the contract they would give to the cleaners it was brilliant because this way they had no employee tax, no liability things like that. I would suggest looking into doing something like this. You can pay the worker (subcontractor) a percent of each job and they will probably end up making more money . But they have the responsibility of buying their own supplies, health insurance , liability insurance. For the company to take on a subcontractor they would check proof of liability insurance. That way you could focus more on selling accounts and less on employee nonsense. Pitch the deal well to your under the table employee and they might be really receptive. Frame it as the business structure is changing and there is opportunity for more autonomy

 

[jlkx]

@michaelenicks I think thats a great idea dn is something have thought of doing. The only issue is there are some new rules with subcontractors (due to uber and Lyft and other on demand type subcontractor services). I think it makes it just as much of a headache to have them as a subcontractor as it does have them as employees. Definitely something to look into though!