I started my own firm as an independent agent reselling merchant services (aka, credit card processing) here in Phoenix in 2020. Now, I’m looking to hire a team, about 10 sales reps that will be all 1099 for now.
I’m debating going through the expense of hiring our training a lawyer. Is that necessary?
I’m also considering using ADP for payroll and HR services. Anybody have experience with them?
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If you are hiring Sales Reps as 1099 (Independent contractors) they will invoice you and you pay them as vendors; no need for payroll services in this case. However, you want to be sure that they are “true” contractors where you are not dictating their hours or supplying their equipment. DM me for more insights.
BTW, I have 20 years in corporate HR (running global HR functions).
Does not work this way in credit card processing. The sales office has to initiate the payment because they have all of the data.
Look up Paul Rianda who is a specialized attorney in our industry. You need to speak with him or someone like him about all of this. You are on the wrong path.
Talk to your accountant too. You can’t just make anybody a 1099 contractor. There are specific IRS rules surrounding it, right down to your management style and any training you may or may not provide.
The last thing you want is the IRS knocking on your door next year looking for back payroll taxes you didn’t pay just because you thought 1099 status was okay.