Discussion:Payroll for just 10 hours

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Discussion Forum Index --> Tax Questions --> Payroll for just 10 hours


MsTwizz (talk|edits) said:

9 January 2007
I am new to payroll, hence the question. Does an employer have to pay an employee if they only work 10 hours out of the year? Is there any kind of minimum?

I feel an employee is an employee and payroll taxes should be taken out no matter what. I don't see anything that says otherwise, but I wanted to be sure.

Thanks!

Jdugancpa (talk|edits) said:

9 January 2007
If I worked 10 hours for you I would surely want to be paid. I think your question is not whether or not the individual should be paid for the 10 hours but whether that person should be set up as an employee and run through payroll, is it not? I think the theoretical answer is that there is no minimum established by which one could say they don't have to be issued a W-2 because they were paid less than the minimum. From a pragmatic point of view, most of us would say the exposure of treating this person as temporary office help without withholding anything would be minimal. I am not saying I would do this, mind you, but I am sure some lurking in this forum would treat the rules fast and loose this way :)

Actionbsns (talk|edits) said:

9 January 2007
Sort of depends on how much they are making and if there are other employees. Ten hours at minimum wage is about $65. If this is the absolute only payroll this client is going to have for the year, are you really going to set up FICA/MC, worker's comp, temporary disability, and all the forms to be filed? The cost to the employer will probably be excessive and it would most likely be a safe move to make that person casual labor. However, if this is an employer, with many employees and all the requisite employee responsibilities are already in place, then I say that even the minimum wage employee needs to be on payroll and receive a W-2 for his/her $65.

Death&Taxes (talk|edits) said:

9 January 2007
Thirty years ago my boss had a client who owned two Dunkin Donut franchises. He trusted no one; everyone received a W-2 even people who worked one day and then were either fired or quit. Come to think of it, I issued a W-2 in 1991 for a person who worked one evening for five hours. Were I not in my business, I might have labeled her 'casual labor' but you know, Caesar's wife or something like that.

Lhhesscpa (talk|edits) said:

9 January 2007
Does an employer have to pay an employee if they only work 10 hours out of the year? Yes. Who would think someone shouldn't be paid for their effort?

Is there any kind of minimum? Minimum for what purpose? I feel an employee is an employee and payroll taxes should be taken out no matter what. I agree completely. -- Larry Hess, CPA, Albuquerque, NM - Talk to me

Actionbsns (talk|edits) said:

9 January 2007
Just another thought MsTwizz, in payroll situations like the one you describe, an issue would most likely not come from IRS but rather from the state. In California, if an employer is audited by the EDD, they get real nosy about casual labor or contract labor. I've seen that become a problem for an employer. Once it's an issue at the state level, it becomes an issue at the Federal level. They way many of these things become an issue is with a disgruntled employee - the guy D&T mentions who worked 5 hours, was ticked off about something and goes running to the labor board. Generally, it's not worth it and I will always counsel an employer to do the W-2.

JR1 (talk|edits) said:

January 9, 2007
For 10 hours? Payroll? You've got to be kidding. No way no how. 1099 if they're over 600, which I doubt it is. And be done with it. Add them for unemployment, workers' comp, etc. and include them for a W2? Only if you're really desperate for fees. Sorry.

Chautauqua (talk|edits) said:

9 January 2007
In some jurisdictions, it may be acceptable to take on a person on a "trial basis". If they don't work out, they are paid and never put on payroll. If they pass the "trial basis" period, all of their pay, including the first few hours, are paid through payroll.

Sandysea (talk|edits) said:

9 January 2007
I agree JR. This is an "employee" who works only 10 hours in a year? Why does the employer have the added costs of matching fica, unemployment and workers compensation to name a few. I would think this also would be "casual labor" and most likely would not meet the 600.00 amount for a 1099....

PJLCPA (talk|edits) said:

9 January 2007
Mstwizz, I think you should pay attention to all posts. I don't dissagree with any of them...But there is a difference in the "correct" way to do this and the "pratcical" way. I like to advise clients the technicaly correct way, and than what their options are. Mark my words...this same client will come back next year after paying someone for XXXX hours, and you told them the correct form was a 1099....

Sandysea (talk|edits) said:

9 January 2007
Touche PJ....this of course could happen and most likely would with a client who then learns to LOVE "casual labor"...hehe

JR1 (talk|edits) said:

January 9, 2007
PJL has an excellent point. We never want to get soooo practical that we can be wrong all the time. We have to be careful to know when to take the practical shortcuts and when not to. We must be in charge of the client relationship and not them. I'd be nervous about a client who's always using "ten hour" people...It was like the kids on payroll of a sole prop, with no other employees. Yes, we can charge to provide payroll services...or just be a bit expedient and serve the client better. It's always a balance, and years of experience matter when it comes to knowing where you have some leeway and where you don't. S corp salaries would be one that you don't...This is why we get the big bucks, eh?

Death&Taxes (talk|edits) said:

9 January 2007
Reading the question again, and more carefully, I see the person has not been paid yet so there is no FICA etc to return. I mention this because at least twice a tax season Father or Mother enters office and at end of interview gives me two W-2 forms for Jack or Jill, their teenager, and then says "She had another job for a week or maybe shorter and didn't get a form. Should I call them?" I don't want to file someone and find Mom has called to say there is another W-2 form, so I tell her to go ahead and call. I've seen parents get ticked off when they think 'employer' has pocketed the taxes....moral, if possible have employee sign for the check with details of the amount.

MsTwizz (talk|edits) said:

9 January 2007
WOW! Thank you everybody for you responses! My question wasn't very clear, was it? I did mean, yes, my client is going to pay this person, but he asked if he had to "run it through payroll." Meaning, did he have to withhold and all that.

He does have other employees, and everything is set up. I advised him to run the employee through payroll. If he were ever audited, it may be found and he would have to explain the situation. Thank you!!!!

JR1 (talk|edits) said:

January 9, 2007
So basically, you're ignoring our advice. That's ok, I'm used to it. Will have more than a few folks showing up soon that do that all the time....it's ok, really, I'm over it. *smiling*

Deback (talk|edits) said:

January 9, 2007
Well, since he already has payroll set up and has other employees, I'd treat the 10-hour worker as an employee and include his wages in the payroll. If there was no payroll set up for the company, I'd expense it under Casual Labor.

Karen258 (talk|edits) said:

2 April 2009
Here is a new twist to the above scenario. My client has maybe 2 employees out of 30 during each pay period that quit the 1st night. That's approximately 50 extra W2s for employees with about 4 hours each. I am just setting them up for his 1st payroll now but I know the industry he is in has a huge turnover. For those of you that suggested casual labor for the above situation would you still use that for this situation. I figure it's about $2000/year total if I classified it as casual labor.

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