W-2 vs. 1099

The business of W-2 forms and 1099 forms can be confusing. If things aren’t made clear, legal issues can ensue for a contractor or contractor applicant.  There is a difference between W-2 employment and a 1099 paid worker.

If you are being paid by a W-2, the employee is legally employed by the company, so he or she has taxes taken out of his or her pay. Most likely, a W-2 employee is also covered by a worker’s compensation insurance held by his or her employer. However, the previous items to not apply to a 1099 worker or independent contractor.

For employers, a W-2 employee can legally work under their license, since the employer is the license holder responsible for the job and work at hand. A 1099 independent contractor must have his or her own license, and carry his or her own worker’s compensation insurance. Whether a W-2 employee or a 1099 contractor, insurance and licenses must be held. If not, penalties and fines can occur to both the worker and employer. Employers should double check to make sure all workers and independent contractors have proper licenses and insurances before any work begins.

If you’re looking to get a Florida contractor’s license, the state accept experience towards the contractor’s license from a person working as a W-2 employee under a licensed contractor, who is properly insured. Any experience, even if it’s several years, cannot go towards the experience needed for a Florida contractor’s license, if the experience came from 1099 work.

Without proper knowledge, many employers and workers, unknowingly, violate the rules above.

If you’re looking to get you Florida Contractor’s license, let us help you. We have been helping people get their contractor’s licenses since 2007. 95 percent of our Florida contractors’ licensing packages get approved the first time. We make getting a license easy, and we do it fat. Click here or call 239-777-1028 to learn more or reach us.