I'm considering opening a Beauty Salon in Miami, Florida and found out that most workers in this field in Florida are paid commission only. First, is this legal? If it is legal, would the workers need to complete a 1099 or W-2?
Are Commission Only Nail Technicians & Hair Stylists considered W-2
Answers
Check w/both the FL Dept of Labor and a FL Employment Attorney.
I agree with Wayne. Note that the basis on which a person is paid doesn't necessarily designate them as an independent contractor (1099) or employee (W2). There are a number of other factors that are involved in determining this. Use of the IRS guidelines determining whether a person is an independent contractor or an employee would be worth reviewing.
There are many factors used in determining if a worker should be classified as an employee or independent contractor; but generally, if you as the owner of the business control or have the right to control what the worker does and how the worker does his or her job and also if there are employee type benefits promised to the worker in writing like health insurance, vacation, pension etc, then most likely the worker should be classified as an employee.
Most beauticians work on a commission basis in form or another. Either the owner/manager pays them a % of that persons work, i.e., as a commissioned employee; or the worker pays the owner a percent of their take - usually in the form of rent.
One huge caveat - I do not know FL labor law.