The Decision to Hire
The moment a solo contractor consistently has more work than they can handle is the moment hiring becomes worth the complexity. But the transition from solo operator to employer is more significant than most expect — you're not just adding labor, you're taking on legal obligations, HR responsibilities, and a new layer of management on top of doing the actual work.
The key decision: W-2 employee or 1099 subcontractor? Getting this wrong has serious tax and legal consequences.
W-2 Employee vs. 1099 Subcontractor: The Real Difference
The IRS uses a behavioral control test — if you control how the work is done, when it's done, and what tools are used, that person is likely an employee regardless of what your contract says. Misclassifying employees as 1099 contractors can result in back payroll taxes, penalties, and interest.
The Hiring Process
1. Write a Clear Job Description
The job description should specify: service types they'll perform, required certifications, geographic area, tools required vs. provided, compensation structure, and schedule expectations. Clarity upfront prevents misaligned expectations.
2. Background and Reference Checks
Essential for anyone entering customer homes. Run a standard background check through a service like Checkr ($30–$50 per check). Call at least two references. For trades requiring a license, verify the license number with your state licensing board.
3. Onboarding and Standards Setting
Your first employee will do the job the way you show them, not the way you imagine they'll figure it out. Spend time on-site with them for the first week. Document your standards for customer interaction, uniform/appearance, job site protocols, and invoice/job documentation.
4. Tax Setup
Before the first paycheck, you need: an EIN from the IRS (free), a state withholding account, unemployment insurance registration, and workers' compensation policy. A payroll service (Gusto, QuickBooks Payroll, ADP) handles the withholding mechanics and filings automatically.
Fieldbase lets you assign jobs to multiple technicians and track their output — critical once you have even one person in the field who isn't you.
Key Takeaways
- If you control how, when, and where someone works — they're likely a W-2 employee, not 1099
- Misclassifying employees as contractors creates significant IRS and state tax liability
- Background checks are essential for anyone entering customer homes — non-negotiable
- Spend the first week on-site with your new hire — your standards only transfer through demonstration
- Use a payroll service to handle withholding, deposits, and filings — this is not DIY territory