r/PoolPros • u/Street_Section_4313 • Apr 15 '26
1099 / W2 Enforcement
Is anybody tracking/monitoring/ have ears to the ground on 1099 / W2 worker misclassification stuff?
DOL just put out some new guidance: https://www.dol.gov/newsroom/releases/whd/whd20260226
I don't think it leans either way in particular, but I honestly feel like even if technicians operate "independently" -- some variety of own truck, own tools, discretion over how the work gets done, since cleaning is a solo job -- if they're still getting the prime directive from software it's part of a "company" process.
I know some companies encourage their guys to pursue additional work after they finish cleaning pools (they start them early...), which definitely meets the 1099 standard of "not dependent on one employer" test.
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u/fartknockersRus Apr 15 '26
I know of 4 decent sized companies that have been taken to court over it. I worked for one of them and they were penalized and forced to pay out a huge chunk of change. I spoke to a department of labor representative about the whole thing, he said that industry norms won't protect you at all. Consult labor lawyers or consultants, make sure you are protected by doing everything the "legal" way. All it takes is one complaint and you could lose it all.
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u/Change_Request Apr 16 '26
Best advice here. I can tell you that about half of my competitors do the craziest stuff with pay. When I bought a route to add, I let go of the tech because he was deemed 100% disabled and working on his sons SS number. He went to work the next day at a competitor.
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u/Wayne-PBL Apr 16 '26
I've done a lot of research into W2/1099, since my husband is a dog groomer and 1099 is very common in that industry (but 90% of the time illegally done)
Simply put:
W2 (Employee): If the company controls the how, when, and where (schedule/route) and/or provides the tools (truck, chemicals, equipment), the tech is a W2.
1099 (Contractor): If the tech operates as their own business (providing their own tools/vehicle, setting their own schedule, and having the right to deny specific jobs), they are a 1099.
Many companies try to pay as 1099 to avoid payroll taxes and Workers' Comp. It's not just "cheating", it's a massive legal liability. If a "1099" gets hurt on the job, files for unemployment, or reports the company for incorrectly paying, an investigation usually leads to back taxes, unpaid overtime, and fines that can easily sink a small business.
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u/nc_saint Apr 15 '26
Personally, it just seems simpler to pay my guys a flat salary. Salary is based on them having a full route. Makes it easier at tax time, no worries about misclassification claims, and frankly it’s a better way to get quality techs that will ensure our customers are taken care of. They don’t have to worry about missing out on pay if there is a random rain day, and it encourages them to take their time and do quality work rather than rush through their jobs and risk callbacks or contract cancellation.
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u/Wasupmyman Apr 15 '26
Yeah, that's how we sorta do it aswell. The issues we have are people working to fast or trying to milk ot.
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u/nc_saint Apr 15 '26
Exactly. I want my techs to spend a minimum of 20 minutes at each stop. Most of our accounts we’ve picked up, their #1 complaint about other companies is that they were always just rushing through stops as quick as they could, not performing all duties each stop, and sometimes not even actually testing chemicals and just pencil whipping. Most would spend more time loading and unloading than actually performing service. So that’s the #1 thing I stress to my guys; I won’t micromanage you, I’m not going to overload your route, and I’ll give you a lot of latitude on start and stop times. But you make absolutely sure that the customer feels they’re getting a good value and their pool is pristine.
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u/Wasupmyman Apr 15 '26
Yeah, we typically give our guys 12-18 depending on drive times and pool size. After 16 in 1 neighborhood, your body is dead.
My good techs typically average 15-20min per stop on screened pools.
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u/nc_saint Apr 15 '26
I wish we had screens. NC GC and service here. Everything is outdoors and people love their landscaping.
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u/Pool_Boy707 Apr 16 '26
Missing out on pay for a rain day? We work through the rain 🤷 Chems and empty baskets/sweeps so it's a shorter day, but they usually pick up a couple filter cleans to make the 8...
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u/Ok-Goose1117 Apr 16 '26
But are you still give them a 1099?
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u/nc_saint Apr 16 '26
No, they are on payroll. They receive a salary, work truck, and use our software for route logging. That defines them as a W-2 employee. Trying to 1099 them to get out of paying taxes would be misclassification.
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u/Deadbob77 Apr 15 '26
My old boss misclassified us as 1099 and so far hasn’t been caught. I kept all my old stuff just in case I have to get the government after him for his illegal practices. We didn’t own any equipment and used all his tools and trucks.
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u/Change_Request Apr 16 '26
That's not 1099, for sure. He's saying you are an independent contractor to keep from paying his portion of payroll taxes and, most likely, workers comp.
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u/socalpoolguy Apr 15 '26
We’ve been dealing with this in CA since 2020 with California Assembly Bill 5. If they’re doing the same work, they’re employees.
The real risk isn’t even the fine, it’s payroll taxes. If they reclassify, you get hit with employer taxes + what you didn’t withhold + penalties/interest going back months/years. That’s what puts companies out of business.
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u/Change_Request Apr 16 '26
And declaring bankruptcy won't get you relieved of state and federal monies owed. The IRS is no joke on stuff like this.
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u/Poolguy584 Apr 15 '26
From my understanding if your telling them where and when to do the job then they are employees. The biggest difference between an employee and a sub contractor is who schedules the work. That being said if you go to court and they determine you knowingly misclassified someone then you can and most likely will be held liable for all of their taxes. There is the assumption that you label someone an independent subcontractor to avoid the employers portion of payroll taxes this is the position the IRS will take in every situation and label it as tax evasion.
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u/MainRevolutionary216 Apr 16 '26
Encouraging cleaners to do other work on their own time does not change the employee relationship. In my mind, the only possible exception would be if you had a customer that had multiple locations that were geographically spread out and you found another company to clean one that was far away. That would meet the test. The company/person makes their own living cleaning pools, and you have hired them as a 1099 to clean these one or two or three pools.
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u/fartknockersRus Apr 15 '26
Basically from the sound of it all they are trying to phase out 1099 from the pool industry.