Donna Bordeaux explains why park owners must treat work campers as employees, not independent contractors. They need payroll, minimum wage, workers' compensation, and site discounts as benefits. Misclassifying them creates liability for injuries, IRS penalties, and unemployment claims.
I'm Donna Bordeaux with campgroundaccounting.com Work campers can be a really great thing for your park and help you get a lot accomplished, help you get a little bit of free time so that you can take care of business without having to work 24 7. But there are some pitfalls you need to watch for. In the old industry standard way of dealing with work campers, an arrangement might have been, you come here and work for me and I'll let you stay on site for free or I'll give you a discount on your site. That was okay and we'll talk about some pitfalls with that. But you have to be really careful how this is handled. In the litigious society that we are in today, people super about anything. And what happens if that work camper gets hurt on your property while performing some tasks for you or they injure a customer in some way? Guess what? You're on the hook. So workers comp is a big issue. And this is where the problem started to unravel. Work campers should be paid and should be reported to your workers comp. On workers comp. You not only have to pay that on employees, you also have to pay it on any subcontractor or any contractor who's working in your park who doesn't have their own workers comp. That includes work campers. Now, the second problem area we have is paying a work camper as an independent contractor. This used to be an industry standard, but it is not really permitted at all based on the characteristics of that work camper. Work campers have to be looked at just like an independent contractor versus employee relationship. If you are providing the tools for that work camper, you have the mower, you have the shovel and the rake. If they're driving around on your golf cart, if that person is told what time to work, if you tell them, I need you to be here for the hours of when people are leaving and coming back into the park, or I need you to clean up sites after people have checked out before the new person arrives. If you are dictating when they work, how they do their job, or what tools they use to do their job, by definition, they're an employee. We can't get away with treating them as independent contractors anymore. They need to be on your payroll. In order to be on your payroll, they need to be making at least minimum wage. And I suggest we just simplify this whole problem of dealing with work campers. It can be very simple. Simplifying means pay them an hourly wage Just like you would anybody else who wasn't staying in your park. Then you can give them the option of having a discount for paying for their site or paying for other things in your park. Offer that same discount to every employee you have. So if you have an employee who doesn't camp, what would it hurt to offer them a discount on their site too, if they stayed at the park? Okay, so treat them equally. They're employees all day long. All right? So get them on your payroll. Make sure it's legit. If you don't have them set up properly, this can lead to some humongous issues. Issues first, if you have a workers comp claim, uh oh, you're not going to like the outcome of that. Next off, if the IRS finds out that you have independent contractors instead of employees and they should be treated as an employee, you have issues dealing with payroll taxes, and those can go back a long way. Also, they can have effects if you have health insurance plans, retirement plans that you would otherwise offer to employees. Next up, unemployment. All right, keep your ears posted here and don't tell anybody, but if an independent contractor applies for unemployment, guess what? They've started the ball rolling. The unemployment agencies all across the country share information and they start the process and assume that that person is an employee because of what that person is going to tell them, it's going to sound like they're an employee. And we have to look at it from your perspective. Are they really an employee? If they apply for unemployment, they'll be given that unemployment and you will have to prove it wrong. So you're guilty until you prove yourself innocent. And honestly, you have very little shot of doing that. So let's get legit. Let's start the world fresh again with RV parks and campgrounds. Treat your workers comp. I'm sorry? Treat your work campers as employees. That's what they are. One other thing I'll mention, a lot of people tell me, well, they do that they were working at one of the state parks down the road and they've never been an employee or received a W2 there. Guess what? You're not a government agency. You can't do the same things that the federal or state governments can do. Those are things that are reserved just for government entities. They don't apply to private businesses. So let's get to legit. Let's put those work campers on the payroll, treat them properly, eliminate the hassles of having these risks outstanding for your park, and we'll move forward from there and make your park even more profitable and investable for other people if you want to sell it in some stage. Thank you very much. I'm Donna Bordeaux with Campground Accounting.
