I understand your concerns here, but I'm also wondering about the 8k figure. Isn't it closer to 3k? (1.45% medicare and 6.2% SS?)
I'd be interested in more background on the industry. My experience is that, exempting cleaners hired by large offices, most cleaners are working under the table or for small firms. The small firms seem to be doing 1099s as well, I know a friend in that situation complaining specifically about the taxes.
So, I do wonder whether this guy is just doing business as usual. Well, actually, not as normal since he (claims to be) issuing tax paperwork (1099s).
If he's misclassified them, the onus will be on him to pay the taxes he didn't pay, and they will have a good case to sue for missed benefits.
Where people typically get screwed in the 1099 scenario is when they receive their first 1099. Most people are used to getting a tax return, not a bill. But, and here's where I have no insight, if he's being honest and up front with his workers, I don't see an issue. I've been on the receiving end of the 1099 conversation several times and never felt cheated, "So you understand, you are not an employee, you are responsible to paying all your own taxes, saving for tax time, your own benefits, etc."
Edit: I also want to state, I still think there are probably ethical/moral issues here. I just don't think that FICA is the issue. I think the reality is that most people vastly underestimate the value of benefits. Most people don't save up for the week or month or more that they are sick or injured and can't earn. They don't prioritize health insurance or save for retirement. People tend to associate these things with "having a job" and I don't know that many people are well-versed in the difference between employment and contracting. (At least from my middle class suburban upbringing.)
I'd be interested in more background on the industry. My experience is that, exempting cleaners hired by large offices, most cleaners are working under the table or for small firms. The small firms seem to be doing 1099s as well, I know a friend in that situation complaining specifically about the taxes.
So, I do wonder whether this guy is just doing business as usual. Well, actually, not as normal since he (claims to be) issuing tax paperwork (1099s).
If he's misclassified them, the onus will be on him to pay the taxes he didn't pay, and they will have a good case to sue for missed benefits.
Where people typically get screwed in the 1099 scenario is when they receive their first 1099. Most people are used to getting a tax return, not a bill. But, and here's where I have no insight, if he's being honest and up front with his workers, I don't see an issue. I've been on the receiving end of the 1099 conversation several times and never felt cheated, "So you understand, you are not an employee, you are responsible to paying all your own taxes, saving for tax time, your own benefits, etc."
Edit: I also want to state, I still think there are probably ethical/moral issues here. I just don't think that FICA is the issue. I think the reality is that most people vastly underestimate the value of benefits. Most people don't save up for the week or month or more that they are sick or injured and can't earn. They don't prioritize health insurance or save for retirement. People tend to associate these things with "having a job" and I don't know that many people are well-versed in the difference between employment and contracting. (At least from my middle class suburban upbringing.)