We own the chairs, stations, mirrors, lights, sinks, overhead dryers, wash the towels, provide all backbar, color, styling products. We do tell them they must arrive 15 min before each scheduled appt. We do advertise/market and assign new clients to them, schedule their clients who call in, set pricing, etc...Because they were our employee. Now we (my husband and I) know that since they are now contractors, we cannot tell them to follow our rules anymore. But we wanted everything else to stay the same. We are not asking them to become renters.
If they want to rent, we will have them bring in their own color, products, schedule their own clients and we will no longer give them our walk-ins.
We don't want to do all that, we just want them to start paying for their own payroll taxes because our business cannot afford it anymore. It will save us over $40,000 ALONE in just social security and medicare (not including state and federal unemployment tax and workers comp).
I need to know the legal way to convert everyone.
Do I give a notice? What if they do not fill out the W-9 I gave them? Do I just stop paying their taxes and stop withholding?
The DOL finally told me it was a question for the IRS. I still need to call them.
Thank you for your help!
