When you begin a new window cleaning business, it can be confusing to navigate the business world. Many find it challenging to understand what licenses are required for a window cleaning business to be lawfully operating. There are many reasons why all entrepreneurs should ensure they have obtained any necessary licensing. The most fundamental reason is to avoid penalties such as fines or other redundant payments. Especially as a new business, it is imperative to begin on the right foot with all of the appropriate licensing.
The Basics of Licensing for a New Window Cleaning Business
When starting a new window cleaning business, one license is nearly identical across the nation. Most states will require an entrepreneur to obtain a business license to operate as a small business within a particular state. Depending on the state, there will be requirements for obtaining state licensure to conduct business. Getting this permit is necessary if an entrepreneur wants to legally operate a business within the state. Failure of an entrepreneur to obtain the appropriate licensure can result in the entrepreneur being penalized and forced to pay hefty fines. In most cases, such penalties and fines can be avoided if the proper business license is maintained.
The key to licensing when it comes to a new window cleaning business is that each state varies in its laws for how it classifies individuals who work in the state. For this reason, an entrepreneur should be sure to take notice of the state-specific laws regarding labor safety and wages. In addition, obtaining a business license is not enough to maintain that business license. For example, suppose a business wants to keep its right to lawfully operate. In that case, it must also comply with state and federal regulations regarding labor and wages for employees and independent contractors.
Business Licensing Carries Strict Requirements for Employers
While it may only take registering a business with the state government entity to be considered lawfully operating, a company can lose its right to lawfully operate. This can occur if it does not abide by state-prescribed guidelines and regulations. Simply obtaining a business license is not sufficient to excuse a business from implementing the appropriate business practices to ensure compliance with any and all state laws.
For example, a business may operate in a state with its own state-level equal employment opportunity commission. In a case like that, the state will likely have stricter rules regarding what a company can and cannot do concerning workers. If a business is unaware of the practices within their state, they place themselves at risk of being penalized. As a result, when you start a window washing business, it is vital to understand that although a business license may be all that is legally required, more is needed when employees are involved.
How to Determine if Employees are Necessary
It may be possible for a business to run successfully by solely using the work of independent contractors. Although this is becoming more commonplace as short “gigs” are becoming more popular, it is always best to err on the side of caution. Most states have legal provisions to protect workers and their rights. As a result, it is always a good idea to tread lightly when navigating the realm of employees versus independent contractors. Incorrect worker classification can result in fines. These fines can be imposed even in cases where it was an honest and authentic mistake.
Because of this, it is necessary to understand the difference between an employee and an independent contractor. Understanding the difference will help maintain the new window cleaning business license without violating any laws or regulations.
The main difference between an employee and an independent contractor is that an independent contractor is not employed directly by the company but provides a service or product for a specified or agreed-upon time. In addition, independent contractors provide services to other businesses.
For example, you may be able to classify your worker as an independent contractor if they also wash windows for several other businesses. The IRS applies a blanket rule to determine whether an individual is an employee or an independent contractor. The IRS looks to the company’s control over how the work is completed, the business aspects of the job, and whether a written contract or other types of benefit exists.
Business Control Over Work Completed
The IRS looks at how much control a company has over a worker. The greater control a business has over the final work product, specifics of how it will be completed, scripts, etcetera, the more likely the individual in question is an employee. Independent contractors have greater freedom over how and when to complete their tasks. For example, an employee may be required to be at work at 6 a.m. Monday through Friday. In contrast, an independent contractor can choose when is most convenient for them to work.
Company’s Control Over Business Aspects
The second factor the IRS looks to when determining whether an individual is an independent contractor or an employee is whether the business aspects of the worker’s job are controlled by the company. In this case, does the window washing company maintain payroll, offer or decline to offer direct deposit, etc. The greater control a company has over the business aspects, the more likely an individual is an employee.
Does a Written Contract Exist?
Finally, the IRS looks into whether a written contract exists. Often there will be an agreement detailing whether the set-up is considered an independent contractor relationship or an employee, employer relationship. However, a contract stating that an individual is an independent contractor is insufficient. Each factor must weigh together to lean closer to the individual being an independent contractor for a court to recognize it. The state and federal governments are looking out for the employee’s best needs. So, even if an employee signs an agreement stating that they are an independent contractor, that does not mean that the court will agree and view the party in such light.
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Because of the ability of the court to sever certain portions from contracts or nullify them, a business must be positive in choosing its workers’ classifications to prevent any interruption to their business license and lawful right to conduct business. Overall, choosing wisely in determining if employees are necessary is imperative. This will ensure the business maintains its business license by complying with all applicable state and federal regulations.