Wow! I am a avid reader of the msn.com homepage so I was shocked when I discovered this article describing the tax technicalities of hiring a day laborer.

In my area of Massachusetts I don't generally see illegal immigrants/legal immigrants/plain 'ol Americans soliciting day jobs outside the Home Depot but I've heard that it's definitely more common in other parts of the country. The article by MSN describes the steps you as an "employer" must take if you plan to hire one of these folks.

After selling payroll in a city with a large immigrant population for three years, I would bet my bottom dollar that I am more knowledgable about this topic than any corporate accoutant or attorney. This article is peppered with inaccuracies, which I assume is MSN's way of encouraging their readers NOT to hire one of these folks.

Personally, I would never invite a random dude I found in a Home Depot parking lot into my home to do random fix-it work but obviously plenty of people do or else this wouldn't be a thriving industry. I also recognize the fact that people who do this type of work are people who actually want to WORK in order to earn a living for their families. Legal resident or not, there is something extremely admirable about a person that would subject themselves to this type of humiliation and hard labor in order to provide food for their children.

The inaccuracies I found in the article that prompted me to blog about it:
1. You do not need to withhold or match FICA (social security and medicare) for day laborers UNLESS you plan to hire them for an indefinite period of time. Since these folks are generally hired to perform one or two specific tasks, they would probably not fall into the "employee" category.
2. As independant contractors, they would not need to fill out W-4 or I-9 forms.
3. If you plan to pay an individual worker (not a company) over $600 in a given calendar year (in the article they said $50 a month to make the threshold seem lower) you will need their name, address and social security number. Technically you would need to issue them a 1099 (similar to W-2 form you receive from your employer).
4. Even if they WERE considered employees (which they're not), you as the "employer" would be responsible for checking their visas and dealing with the higher tax implications. For example, someone receiving a paycheck on an H-2B (technical worker visa) would be taxed at a higher rate than an American citizen. They do this in order to encourage American companies to hire American citizens over legal foreign workers. The article fails to mention this.
5. The article was correct when they mentioned that a worker could sue you if they get hurt on your property. Then again, so could a guest you invite into your home that injures themselves on your stairs.

A simple, legal way to get around all of this is to "rent" them tools by bumping their pay and backing out the rental fee. In almost every state, a worker who provides their own tools is considered an independant contractor. When was the last time you withheld taxes on the contractors you hired to re-do your kitchen, paint your house, or landscape your yard?

Of course I'm not a tax professional so this is merely my educated opinion, not actual legal advice. However, it really irks me when journalists aren't forthcoming due to their own anti-immigration agendas. I say make them all legal and then tax them. The nay-sayers constantly complain that these workers aren't assimilated into American culture so why not let them share our tax burden - it's the American way.