Mastering 1099 Contractors: Transform Your Low-Voltage Projects and Boost Efficiency

Evaluating 1099 contractors is crucial for businesses looking to maintain flexibility and quality in their projects. Understanding the evaluation process—defining needs, verifying credentials, assessing quality, and ensuring compliance—helps businesses select the right contractors for their requirements.

• Understanding the definition of a 1099 contractor 
• Exploring the benefits of hiring a 1099 contractor 
• Defining specific needs for projects 
• Verifying the credentials and skills of contractors 
• Assessing work quality through references and portfolio 
• Legal considerations and the necessity for appropriate insurance 
• Payment structure: hourly vs. piecework 
• Evaluating company fit and professionalism

Chapters

• 0:00 Understanding 1099 Contractors in the Industry
• 10:36 Evaluating and Hiring 1099 Contractors
• 20:57 Empowering Through Cabling Connections

Transcript

Speaker 1: 0:00

Welcome to let's Talk Cabling, the award-winning podcast where knowledge is power and the low-voltage industry connects. Hosted by Chuck Bowser, rcdd. We're here to empower installers, designers and industry pros with the tips, stories and best practices you need to stay ahead. From copper to fiber, standards to innovation, this is the show that keeps you plugged into success. So grab your tools, turn up the volume and let's talk cabling.

Speaker 2: 0:36

Wednesday night, 6 pm, eastern Standard Time. That can only mean one thing Live after hours with your favorite RCDD. You know that's me, your favorite RCDD, don't even try to pretend like I'm not. So tonight's show I got something a little different. So tonight's show was actually a suggestion from somebody on one of my platforms, was actually a suggestion from somebody on one of my platforms. They asked me to do a show on how to evaluate a 1099 contractor. So that's what tonight's show is about. So I'm not doing any questions tonight. Although, put your questions in the chat boxes and I'll save them and I'll use them for the next show.

Speaker 2: 1:22

What are you drinking? What are you drinking? Earl Grey tea, earl Grey tea with honey and an essential oil. Throat lozenge yes, taught a class today. Ooh, that's hot. Taught a class today, so I got a bit of a sore throat. It always happens when I teach a class full-time like that, especially an all-day class.

Speaker 2: 1:46

Now let's also acronym challenge. I'm going to do something different for the acronym challenge. You know I was meeting with I did a meetup down in Tampa last week and somebody said, chuck, how come you never, never, say anything about the, the Big C ICT field practice guidelines? I mean, there's a great books. I've sure thought you would like them. I'm like hello, hello, they're in every single episode. I use these things all the time, all the time. So I'm going to do the acronym challenge from this today. I'm just going to pick one out of here Do, do, do, do.

Speaker 2: 2:21

And then I want you to put in the chat box below what do you think that acronym means? Alrighty, so let me find an acronym real quick. Here we go. Acronym you ready? Let's see here GFCI, gfci. What does that acronym mean? Go ahead and put it in the chat box. Go ahead and put it in the comments. See if you know what that means. Chat box open that up. Dr Shotsy's in the house with Dr Pepper. Dr Pepper, of course, always, always, we miss you.

Speaker 2: 2:57

We kicked off the next study group. It's kind of not the same without having you there. Shotzi Again, drinking Earl Grey tea with honey and some throat lozenges. Gfci, all right. So TJ Pates in the house. He says ground fault, circuit interrupter and 10,000 points to TJ. You got it, my friend. You got it.

Speaker 2: 3:20

So again, like I said, tonight's show is all about 1099s. What is a 1099 contractor and how do you vet one? So let's talk about, first off, what is a 1099 contractor? Wire for excellence is in the house. Good to see you, my friend.

Speaker 2: 3:42

So what is a 1099 independent contractor? They are not a full-time employee. They're not a full-time employee. They typically work on a project-by-project basis or maybe even just fill in for hours somewhere else. A 1099 contractor does not receive health benefits, retirement benefits, they don't get paid holiday, vacation time.

Speaker 2: 4:06

The 1099 contractor is someone that they have to file their own taxes, right. So you'll give them a 1099 form. They got to pay their own taxes and typically they got to provide their own tools, their own equipment and their own transportation. But when it comes to the tools, though, it depends on the tool. You say there's a 1099 contractor in our world. Is um hand tools? Yeah, they're gonna need punch tool and screwdrivers and stuff like that, but are they really gonna be expected to carry a certifier or a hammer drill? It kind of depends. That's something you need to work out with the contractor ahead of time. So JG says is it worth staying in the telecommunications world? Yes, it is. Tj already answered it for me yes.

Speaker 2: 4:55

So what are some of the benefits of hiring a 1099 contractor? It doesn't matter if you're a big company or a small company. It doesn't matter if you're a big company or a small company. Hiring a 1099 contractor can help you quickly ramp up or ramp down on project needs. Let's say you're a small little shop and you only have like five technicians and you all of a sudden win a project that's going to need oh, it's been this over. There we go and you win a project that's going to need 20 employees.

Speaker 2: 5:24

See, a lot of people don't realize. You know, when you see an employee get hired, they're like they don't realize the cost associated. There's recruiting costs. You've got to bring the person on, there's onboarding, and then they're not really up to speed for a while and you just started a project that you need to gear up now. There's a lot of money with that. So there's some advantages to doing that and hiring a 1099 contract. Another great thing, too, is you avoid those long-term financial commitments by hiring a full-time employee. So if that project winds down, you can easily say okay, we're done. There's no workman's comp, there's no unemployment, anything like that. Also, having a 1099 as a company, you're going to save a good bit on overhead expenses as well too, because you don't have to pay for those benefits, like I said, the unemployment tax, the payroll taxes, and also you only really need to pay for the work that they completed, which could also help reduce labor costs.

Speaker 2: 6:23

We'll talk about whether you should pay hourly or you should pay piecework here in a little bit. This also gives you using 1099, also gives you the access to bring in somebody who's got high specialized skills, like, let's say, for example, let's say that I win a project and I got to do some OPGW OPGW there's an acronym for you. Well, I might do a 1099 with TJ who's in the TikTok feed because he's got the experience with that. So a lot of small companies. They might be really good with copper but they may not be good with fiber, so you might do that. Or you might have somebody who's doing AV or somebody who's doing door locks or security. That might not be your forte, but you win a project that's got some of that in it and instead of pushing your way through it and messing it up and making the customer mad, you might bring a 1099 contractor on board to do that.

Speaker 2: 7:17

Now, a good thing is somebody said he took my. When did you take the class? That's cool. Somebody in the tech deck said they took my class. So you having the expertise again, faster onboarding for niche projects, because you don't have to really teach them the ins and outs of how to fill out timesheets. You don't have to teach them how to do, you know all those other requirements, you can put them right to work and it's less of a burden as well, because you have less paperwork than when you're hiring full time, because there's a lot of paperwork you got to fill out for the federal government and you avoid those issues with PTO. But here's the thing yes, they can be a great resource, they can be a great add-in, but you've got to be able to evaluate, you've got to be able to vet that contractor, right.

Speaker 2: 8:05

So I'm going to break this down into a couple different sections. So the first section is going to be define your needs, right. The second section is going to be verify their credentials or experience. The third section is going to be assess their work quality and reputation, and then the fourth section is going to be legal and compliance. Okay, so I got four sections to get through in the next 23 minutes. So I already covered what is a 10-9-9 contractor.

Speaker 2: 8:34

So first you've got to define your needs. What are the skill sets that you need that you don't have in-house? You've got to identify those. Do you need somebody who has fiber optic skills? Is it going to be fiber optic skills for, like, cable TV, or fiber optic skills for just regular backbone? Is it going to be installing AV equipment? You got to think about what kind of skills they need. So that way, when you reach out to people because they're going to want to know what exactly is it that you need, and make sure that they're familiar with all of the industry standards, like maybe NYSET certified for security, maybe BICSI for copper and fiber construction, maybe the ANSI standards, obviously you're going to want them familiar with the code.

Speaker 2: 9:21

So once you know what kind of skill sets that that person is going to need, what is the project timeline and what is the workload that you expect them to do, because you're going to want to put this all down in a contract, so that way you put it there in writing, have them sign off, so there's no surprises. So let's say, for example, let's say it's only going to take two weeks, well, let them know there's going to be a two-week gig. Or if it's a six-month gig, let them know it's going to be a six-month gig Because that way, if they have other commitments, they can either say yes or no or move things around because maybe they might want to work with you. Also, avoid overcommitting to a contract that's already stretched too thin. So if it's 1099, you know this contractor and you know that he's already doing another large project and you know there are similar-sized companies. You and they said yes, they'll send you somebody. One of the worst things we do as an industry is we want a project and then we'll say okay, we'll be there Monday, and then we're not there Monday because the crew didn't finish the previous project on the Friday before. So watch out.

Speaker 2: 10:36

You may want to ask them how is their pipeline? Look, what kind of projects are they working on now? Do they have spare capacity to give you somebody or people? And when you bring them on, are we going to be paying you hourly or are we going to be paying you piecework? So a lot of people shy away from piecework. Piecework is not that bad as long as you identify everything up front, define those payment structures first. You don't want to do that afterwards, say, okay, we're going to pay you hourly, here's the rate. Who has the ability to say I need you to work overtime? What is? Who has the ability to say I need you to work overtime? What is the cost for overtime?

Speaker 2: 11:14

There's all kinds of things you need to know for somebody that you're going to be bringing on and then hopefully you can be picking somebody that has credentials. Credentials and we get. We have this conversation with people all the time. You know I don't want, I don't think credentials aren't worth it. I've been in the. It does not necessarily mean you're better than somebody without a credential, but having a credential validates, it ensures that you have industry compliance, that you have industry knowledge right and there's going to be higher certifications often indicate greater expertise. So if somebody is a Bixie tech, they're going to have greater expertise, greater skills than somebody who's an installer copper. Somebody who's got a CFOT will be better than somebody who has an A-plus certification. Make sure that those certifications match with the skills and stuff that you are asking them to do and make sure not only that they don't have to let them say, yeah, I've got a certification. Make sure you say provide me a copy of that certification, verify that certification. And then you want to ask them okay, because there's a lot of people like me. I was in the industry for 20 years before I got my Bixie Technician certification. So I got 20 years as a Bixie Tech, but I got over 40 years of experience in this industry.

Speaker 2: 12:41

So ask them that, this potential 1099 candidate how many years of experience do you have? What size projects have you worked on? What size timelines? What type of customers? Was it government? Was it commercial? Was it retail? Was it schools? There's a big difference between doing a project that's in a school as opposed to a project that's in a commercial office building. So if they've got the experience but it's not in the right vertical, that might not be a good fit. You know, with schools you're going to have problems like access to closets and doors, working around timeframes that don't impact the kids' schedules and stuff like that. They also have inspectors that inspect their own stuff. There's a lot of stuff that you've got to go through in schools that are an additional layer that you don't have with commercial projects.

Speaker 2: 13:31

So ask them if they've got the years of experience in the type of vertical that you're going to be placing them in. You're going to be placing them in, and don't be afraid to ask them hey, do you have any pictures of the jobs that you've done before? Do you have any contacts, do you have any references from customers that can call you up? Make sure you speak to them and say, look, I want your honest feedback. Don't be afraid to call up on references and don't be afraid to look at job photos. You know a lot of people. I see this a lot of time on social media. People post pictures of their jobs all the time on social media and they think it's great stuff. And I look at them and go, yeah, that's a C at best, not even a B, it's a C. I don't tell them that, but I don't want to. You know, harm people's feelings. But you know, have them show you pictures of job photos that they've done, especially in the vertical that you're looking for.

Speaker 2: 14:23

Then what you might want to do is, now that you have references for customers, maybe ask for references from previous employers, because they may not have been a 1099 the whole entire time in communications. So find out who they worked for before. Call them up and do them Ask them, those people you're talking, to ask them about their job performance. Ask them how were they at problem solving? Were they dependable? Did they show up every day? If they said they were going to do something, did they do that?

Speaker 2: 14:53

There's a lot of things that you can do, and another thing that you can look at too when you're trying to vet that 1099 is go look at their social media platforms. Go look at their social media, especially LinkedIn. Linkedin's a professional site, so go there and you know, is their LinkedIn profile very basic? You know, no banner. They just got one job and a date and maybe a picture that looked like they took on a job site. Or is it well-maintained? Because if they're taking the time to build out their Leviton profile, chances are they're going to do the same thing with their jobs and look to see. Did anybody recommend them? Did anybody give them testimonials? That can also help you reveal reputations and trends.

Speaker 2: 15:47

And then what you might want to do and you're probably going to have to pay for this have them come in and assign them a small task to do or a small job or trial run, like if you've got a really large job that's going to be three weeks, four weeks a month, two months, three months. Maybe bring them in as a 1099 on a job that's only a couple, two, three days, and let them run with that and see how they do with that. Assign them the tasks. Who was it that said it? Trust but verify? It's always to me. I always see it credited to Colin Powell. Jimmy, I always see it credited to Colin Powell, but I don't know if he was the one who actually said it Trust but verify, verify, trust but verify.

Speaker 2: 16:22

So yeah, give them the project, let them run with it, go out and do the QA inspection and see how they did. Did they do it per the code? Did they do it per the standard? Did they do it per the way that your company likes to see the work done? Everybody views quality a little bit differently. What might be quality installed for somebody may not be quality for your company. And then also think about when you gave them that small little test project to do, how did they handle the communications? Did they turn in their stuff daily, their paperwork daily? Did they get the project done on the deadline that they say they were going to get it done on? Did they fill out any other project paperwork that you asked them to do, and do it in a timely manner? Was it legible? Was it readable. So, again, it's better to figure this out on a small project before you put them out on a big project. Big project, let's talk about some legal and some compliance considerations, right?

Speaker 2: 17:27

So when you bring on somebody who's a 1099, make sure that they have the proper insurance, make sure they have general liability, make sure, if applicable, make sure they have their own workman's comp, because that's going to protect against potential legal issues and financial disputes if something goes wrong. Trust me, something goes wrong on every single project. Something always goes wrong. Even the best, well-laid-out, best-planned project. Something goes wrong. And don't just ask of it. Make sure they provide you proof of coverage before hiring. Before hiring, verify that their business has been registered with the state. Make sure they're an LLC or sole proprietor. Make sure they've got all that paperwork in line with the state and the county that they're working with. Make sure they're performing as a legitimate business entity. That way you don't run into any problems on the backside.

Speaker 2: 18:25

And then what you're going to want to do is you're going to want to create some type of scope of work, some type of payment terms, some type of liability cause. You would basically just create a project plan for them and put it in writing and be as detailed as you can. When you're detailed like that, that's going to avoid mishaps. I'm dealing with one right now where somebody asked us to do something. We did it. They did the letter where we said we were going to do it and they were expecting something a little bit else. That wasn't written in the contract. Right, make sure that you clearly outline the work that you're expecting them to do, the deadlines you expect them to meet and if there's any penalties, is there any penalties associated with that?

Speaker 2: 19:18

You know, the thing people don't really think about, too, is when you're trying to evaluate a 1099 contractor coming on board. You know, a 1099 contractor coming on board could potentially end up becoming a full-time employee, so keep that in mind. So, with that in mind, how does this 1099 contractor fit within your company, with the culture of your company and the professional of your company? Again, I've seen technicians that would literally show up for work in jeans that had stains on them and holes in them and just looking unprofessional. But if your company has uniforms and they expect that next layer up of professionalism, then maybe that person might not be a fit for you.

Speaker 2: 20:03

Now, there's nothing wrong with wearing jeans, especially on a construction site. They're going to get tore up, but you still don't want to make sure you have jeans that maybe don't have holes in the knees and stuff like that. You don't protect your knees too. Wear the right kind of shoes, did that person? When you're talking about how they fit in with the company, did they? Again? Communications that's pro tip number two on my list communicate, communicate, communicate. Right, did they communicate? You know well when you gave them this job, were they punctual and reliable or were they consistently late or did they do things that disrupt the project schedule episode.

Speaker 1: 20:57

Don't forget to subscribe. Leave a review and share it with your crew. Got questions or ideas for the show? Chuck wants to hear from you. Stay connected, stay informed and always aim for excellence. Until next time, keep those cables clean, your standards high and your future bright. Let's talk cabling empowering the industry, one connection at a time.