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Thread: Independant Contractors

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    Senior Member Elegant Limousines of Palm Coast's Avatar
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    Quick ? . Is there such a thing as an Independant Contractor agreement that protects the contractor from a company. Ex: Company A reserves a driver and cancels them to do the job themselves or just cancels them all together, is this right? Should a contractor have an agreement with the companies he / she works for to protect them from losing $. Should they have a clause that if they dedicate themself to your company and you cancel them a day or 2 before that they should still receive some kind of compensation ? I know as a company I have a cancelation policy in place for clients. Just wondering who protects the Independant contractors ..Maybe a silly ? but its still a ?

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    Super Moderator Limo Scene's Avatar
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    An IC could certainly write or demand this clause in their contract. In the case, this is a true IC relationship in that the IC had "risk" and was burned in the "risk". On the flip side, I am not sure I would sign a contract with an IC that says I have to pay him if I cancel him as of course I would like to use my own in-house people before using the IC.
    Jim A. Luff
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    First of all is the I.C. a true I.C... Lets say I hire a Guy to come an fix my roof. I am providing all the material so he does not have any expense out of his pocket (I assume you are providing the Limo). We make a verbal deal that he will start to work Tuesday morning. Over the week end, I come in contact with another fellow who tells me he can do the same job for less money. Monday I call Guy #1 and tell hime that I have decided to have some one else do the job. I probably have a moral obligation to Guy #1 but I do not believe I have a legal obligation to him because the contract was NOT in writing. Now if it were in writing and contained a cancelation Clause then I think I would be on the hook.

    I do not think there is anyone out there in this business who would sign such a contract because many of the Guys who use "I.C.'s" are trying to "beat the system" and do not want to put anything in writing.
    David E. Merrill

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    Senior Member ADAM's Avatar
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    An independent contractor is his own business and can establish whatever conditions he sees fit to accept business from others. The only way it is a contract is if both parties agree to the same conditions before the work is performed. A written document signed by both parties is the only way to demonstrate such an agreement exists.
    Marc Rold
    Wild Horse Limousine
    www.wildhorselimo.com

  5. #5

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    Take a look at the other side...what if he calls you up at the last minute to cancel on you? unless you have a backup driver you will be scrambling to replace him right away.
    works both way and loyalty goes a long way

  6. #6

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    Quote Originally Posted by martin in L.A. View Post
    Take a look at the other side...what if he calls you up at the last minute to cancel on you? unless you have a backup driver you will be scrambling to replace him right away.
    works both way and loyalty goes a long way

    Exactly! Written contract or oral contract, it's the same to me. It's all about honor and integrity. I've had companies farm stuff to me and then at the last minute, take it back because they had a cancelation. But that is total BS. I've been in the same situation as the company farming out, but I would never leave someone hanging after I gave them the job. I don't do business with the companies that play those games.
    Tough times don't last. Tough people do.

    Limo Kings Limousine Service
    www.limokings.net

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    Now remember an IC owes his own business or vehicle. If you are driving someones vehicle you are not legally an IC.

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    Senior Member Cedar Mill Limousine's Avatar
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    Quote Originally Posted by Dream Limo View Post
    Now remember an IC owes his own business or vehicle. If you are driving someones vehicle you are not legally an IC.
    Not really sure how true that is.


    http://www.limousinesonline.com/show...rivate+drivers

    http://cbs3.com/topstories/limo.driv....2.298769.html
    Rich Rottier
    219.808.0976 | richrottier@gmail.com

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    Super Moderator Limo Scene's Avatar
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    Cedar, I can tell you for certain that the statement is b.s.

    As most know, like Dave Merrill, I am opposed to IC's in this business. But, you can indeed be an IC and not own your own car under a variety of circumstance. The IC can lease the car from the limo company on a daily/weekly/monthly basis. He can pimp himself out to drive for several limo companies as well as private parties who own their own chauffeur.

    The statement is off base and incorrect.
    Jim A. Luff
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    Just so that you know, for some reason when the forum changed to the new format, none of my former idenities would work. As a resullt, I opened a new account under my stage name of Earl Metcalf. I do a little amateur acting from time to time.

    Yes this is one issues that I do agree with Mr. Luff. (we do however disagree on plastic cups in the Limo). I have softened a little however. I see no problem with a person being an Independent Contractor as long as the Guy he is contracting with is not doing it just to gain a competetive advantage on the competetion at the expense of the Independent Contractor. By this I mean the guy who owns the Limo company pays the Guy enough to cover the expenses that have been shifted to the Driver. One Guy I worked for thought he was really paying me a lot when he offered me minimum wage and I could keep all the tips. Yeah right. By the time I get done paying my social security, cover my accident insurance, pay my taxes, things that he as the employer would be paying I end up makeing less than 1/2 of what a full employee is making.

    I feel that at a minimum, an Independet contractor should be receiving 60 per cent of the gross of the run. He should be expected to purchase the fuel and be responsible for any damage he may do to the vehicle. The Independent contractor should receive 100 per cent of the tips. He earned it. not the owner of the Limo.

    Another way is for the Owner of the Limo to just lease the driver the car for the day just like he was Hertz of Avis. The driver keeps 100 per cent of the run. The owner of the Limo makes his money on by renting the Driver the Limo for the period of time agreed upon. This the way it is done in the Taxi industry and seems to work rather well. They have very little intervention from the IRS any more.

    Just My opinion Guys, I am still around the transportation industry, just not currently running Limos.

    David Merrill
    West Branch, Mi.

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    Super Moderator Limo Scene's Avatar
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    I do hear you Earl. I think you are right about the pay and the whole leasing the car for the day or week would be the ideal setup. What I am opposed to is the people who truly have "employees" but they don't want to admit it for the sole reason that they want to avoid paying payroll taxes, workers comp insurance and overtime.

    If a chauffeur is driving a car owned by a company and the company makes the car payment, pays the insurance premium and buys the gas, the chauffeur is an employee. It is pure and simple. The chauffeur has absolutely no financial risk and that, in the eye of the IRS, is the key. An I/C must have a significant financial risk or investment.
    Jim A. Luff
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    On the topic of whether an IC is truely an IC or not I offer the following. I'm a partner w/ a friend in a water truck that we essentially rent out to the Fire Dept. on wildfires here in Ca. I'm a 1% owner in the company and recieve 25% of the gross revenue generated. In addition I pay 1% of all the mechanical work, fuel, registration, ins. etc... This does however, make me pay an additional 15% "self employment" tax on my IRS filing. A major bummer for sure and definitely needs to be thrown into the equation when decideding on whether or not to become an IC. I would think that this type of arrangement could also apply to a limo co. Just a thought is all.

    Steve

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    Super Moderator Limo Scene's Avatar
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    I want in on that deal! You only own 1% of the entire company but enjoy 25% of the gross revenue? Then of the 25% you receive you are only responsible for 1% of the overhead?

    Let me do some math here and tell me if this is how it would pencil out:

    Annual Revenue from Rentals = $60,000
    25% of revenue paid to you = $15,000

    Expenses
    DMV Tags = 400.00/yr.
    Fuel = $3,200.00
    R & M = $600.00

    Total Expenses = $4,200.00 x 1% = $42.00

    Your net income = $14,958

    Am I getting this right?

    In your particular case, this does not make YOU an IC but the company is an IC to the fire departments or South Ops or whatever coordination centers you serve. The company then pays the driver of the water truck right?
    Jim A. Luff
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    Member Limo Padawan
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    You got the math correct. My partner and I also have to drive the water truck on the fire lines. We work 12 hrs. each 'round the clock 7 days a week when called up by Cal Fire. They then write my partner a check (as it's his trucking co. that the H20 truck is under) and in turn, he cuts me a check. The #'s you quoted were scary close to the actual dollars we made this year @ the Shasta fires. It works out to some $2,400 per 24 hrs. Yes it works out well for me but it also works out well for my partner as he makes around $1800 per day. He benefits by not having to pay workman's comp.and he gets a driver whom he can trust and one he knows will clear his schedule literally at a moment's notice; a very important aspect in that business.
    The point is that I think that this type of arrangement could work for the limo industry as well. Albeit the #'s may have to be juggled a little bit but the idea is there. I'd do something like this if I could incorporate the detailing of the limo(s) into the mix as well. This would effectively eliminate the workman's comp. issue as the "partner" would hold stake in the company as well. My wife says I'm on the weed and a little crazy to think this would work but everything starts w/ an idea right?

    Steve

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    Super Moderator Limo Scene's Avatar
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    The reason I was so close in the math is my wife is in the fire business and works as an equipment resource manager on wildfires and I do pay attention to her when she vents about her job.

    It is still a very sweet set up you have.
    Jim A. Luff
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