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Ghaster Painting & Coatings February Newsletter
Dear customers and friends,

We sincerely hope this new year has started out with positive results for you and your business. Thankfully we are busier than ever before. Some projects we are working on are the Petsense building at Raintree and the 101 (you may have seen our banner there), downtown at the Digital Realty Trust building, the City of Mesa Hohokam stadium for the Cubs (coming out for Spring Training), Costco in Arrowhead and at Forever 21 locations around the southwest. Thankfully, the weather is cooperating (for the most part) making it a great time of year to paint. Let us know if you need a bid.

We received this email from Advantec, an HR Management Firm, recently which caught our attention. It addresses the risks of classifying a person as an independent contractor who is technically an employee to reduce payroll taxes. This is also known as 'piece work' and is unfortunately a growing and all too common practice in the painting industry. It causes the worker to be forced to do high levels of production and skipping the most important part of the job…prep. It may work well for the contractor but at the expense of the worker, the customer and the quality of the job. When you hire a painting contractor (or any other contractor), make sure that the workers who will be on site at your job will be true employees and not independent contractors (legally an independent contractor has to have a license and insurance.) Please see the below article for more information on what the IRS plans to do about this issue from a tax standpoint:

White House, Congress and DOL Plan to Crack Down on Worker Misclassification

Some employers misclassify workers who should be considered employees and instead treat them as independent contractors. Federal and state governments are concerned with this trend for at least two reasons. First, the IRS believes that part of the "tax gap" (the difference between the taxes the IRS believes are owed and the revenue it receives) is due to worker misclassification allowing companies to avoid payroll taxes for independent contractors. This year, the IRS will perform 2,000 random employment tax audits, with particular attention given to corporations' use of independent contractors. Second, the Department of Labor suspects employers use misclassification to deny workers benefits and overtime pay. (Advantec newsletter - see advantec-hr.com for more)

According to an article published on Law.com, companies are taking this unlawful short cut as they have discovered that in this economy "It's more cost-efficient to bring in independent contractors and temporaries rather than hire full-time, regular employees and incur the high costs of employee benefits and employee programs. While the number of workers choosing to become independent contractors is growing, companies who hire them may face a hidden downside to this trend -- lengthy IRS or state audits, heavy fines, and discrimination lawsuits -- all due to employer misclassification of 1099 workers."

So, the moral of the story is to use contractors who do things the right way and hire their workers as full employees regardless of the extra cost.

On another note, Ghaster Painting & Coatings is now on Facebook! If you are a Facebook user, simply click on the Facebook icon below and become a fan. You will be able to see what we are up to, be the first to hear about special offers and see photos of our recently completed projects.

facebook Thank you and have a great week.

Brad A. Ghaster
Ghaster Painting & Coatings  |  3120 W. Carefree Highway  |  Suite 1, PMB #347  |  Phoenix, AZ 85086
Ph: 602.277.8541  |  Fax: 602.277.8576  |  Toll Free: 888.277.8541