If we have an employee that wants us to pay his monthly commission to a company his wife owns so as to avoid child support, is this allowed by law?
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If we have an employee that wants us to pay his monthly commission to a company his wife owns so as to avoid child support, is this allowed by law?
Asked on May 30, 2012 under Employment Labor Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If he is an employee, you can't pay his salary--including his commission--to a company; if he's an employee, you need to pay him individually, and the salary is reported against his SSN.
If he is an independent contractor--and legitimately an independent contractor, which means he meets the requirements to be considered one, which you can find on the U.S. Department of Labor website--then as independent contractor he can have you pay his compensation to an LLC or corporation if he chose, and you would issue a 1099 at the end of the year using that business entity's employer identification number (EIN) or tax-ID number.
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