Can a Security Guard Be a 1099 Contractor?
Wondering whether you can have a 1099 security guard or do they need to be classified as employees? Let’s answer that question for you!
If you’re running a security company, you know this already: Security guards are the backbone of your business.
They're the ones keeping your clients' operations running smoothly, and you need to make sure they're set up for success. That includes proper classification — can you have a 1099 security guard? Or do they need to be employees instead?
The answer can impact your bottom line and leave you facing some serious legal trouble. Misclassifying your guards can lead to tax issues, lawsuits, the whole nine yards.
But here's the good news: It doesn't have to be a mystery. Let's clear things up and get you confident about classifying your security guards the right way.
Can a security guard work as an independent contractor?
Security guards generally don't qualify as independent contractors. The IRS has strict guidelines for who gets a 1099, and security guard roles often fall outside those parameters.
This is because security guards usually don't have the level of control over their work schedule or duties that define an independent contractor.
Disclaimer: The information provided in this article is for general informational purposes only and is not intended as legal advice. Laws and regulations regarding employment classification can vary by state and are subject to change.
We recommend consulting with a qualified legal professional to address specific circumstances and ensure compliance with applicable laws.
Why you generally can’t have a 1099 security guard
Here’s a quick rundown of why security guards are generally not independent contractors:
- Security companies control schedules, uniforms, and protocols, limiting guard autonomy (unlike independent contractors).
- Security guards have supervisors for monitoring and performance reviews, unlike independent contractors with minimal oversight.
- Security guards work for one employer focusing solely on their needs, while independent contractors can juggle multiple clients.
1. Control over work details
Security companies exert significant control over every aspect of a security guard's job, leaving little room for independent decision-making. This control extends to:
- Schedules: Unlike independent contractors who set their own hours, security guards are usually assigned specific shifts.
They may have limited flexibility to swap hours or choose their availability based on personal needs. This rigid scheduling reflects the employer's control over the guard's time and availability.
- Presentation: Security companies typically mandate wearing a specific uniform that represents the company and adheres to a professional dress code.
This control over a guard's appearance goes beyond simply suggesting professional attire. It ensures a consistent brand image and level of professionalism for the company's clients.
- Strict protocols: Security guards are expected to follow a clearly defined set of protocols and procedures established by the security company.
These protocols might include everything from access control procedures to conflict resolution techniques, use of force guidelines, and even specific communication protocols when interacting with the public.
This level of prescribed conduct falls outside the realm of independent contractors, who typically have more autonomy in how they complete their tasks.
Security companies rely on this standardized approach to ensure consistent and effective security practices across their entire workforce.
This level of management of daily tasks points towards an employer-employee relationship, not an independent contractor.
2. Continuous supervision
Security guards require hands-on management and supervision — they don’t usually work independently. Security companies typically have:
- Dedicated supervisors: Security guards report directly to supervisors who play a crucial role in their daily activities.
These supervisors monitor the guard's performance, address any concerns that arise during a shift, and ensure they are following established protocols.
This direct oversight reinforces the employer-employee dynamic, as independent contractors typically work with minimal or no supervision.
- Regular performance reviews: Guards are evaluated regularly to determine their effectiveness and ability to maintain company standards.
These reviews might be conducted by supervisors or designated HR personnel. This ongoing evaluation process allows the security company to identify areas for improvement and ensure guards are meeting expectations.
- Enforced company policies: In addition to specific job duties, security guards are expected to follow established company policies.
These policies might cover everything from workplace conduct and anti-discrimination practices to reporting procedures, use of company property, and data security protocols.
Independent 1099 contractors usually operate with more freedom from company policies beyond those directly related to the specific project they are contracted for.
3. Work exclusivity
A key distinction between security guards and independent contractors lies in the concept of work exclusivity.
- Primary employer: Security guards typically enter into an employment relationship with a single security company at a time.
This dedicated employer relationship strengthens the case for employee classification.
Unlike independent contractors who can (and often do) juggle projects and clients simultaneously, security guards are expected to focus their work efforts solely on the needs of their primary employer.
- Focus on employer's needs: Security companies rely on their guards to be fully invested in their specific protocols, procedures, and company culture.
This focus on the employer's specific needs is difficult to maintain if a guard is dividing their time and attention between multiple clients or security companies.
For instance, a guard working at a construction site at night might need to be familiar with the specific access control procedures and emergency protocols established for that particular location.
Juggling such site-specific requirements alongside security duties for another company would be impractical and potentially compromise security effectiveness.
- Conflict of interest: Security guard positions often involve a high degree of trust and responsibility. The potential for conflicts of interest arises if a guard is working for multiple companies at the same time.
Legal consequences of misclassification
There are significant legal risks associated with misclassifying an employee as a 1099 security guard instead of a full-time employee.
Here's why it's crucial to get it right:
IRS penalties
The Internal Revenue Service (IRS) strictly enforces worker classification rules. If you misclassify a security guard as an independent contractor, you'll be responsible for paying back taxes, penalties, and interest.
This can quickly become a substantial financial burden for your company. Here's a breakdown of what you might owe:
- Unpaid payroll taxes: Security guards, as employees, are subject to payroll taxes like Social Security and Medicare.
If a guard is misclassified, the company will owe back taxes for both the employee's portion and the employer's matching share, along with penalties and interest on the unpaid amount.
These penalties can be significant, accruing daily until the back taxes are paid in full.
- Potential worker classification audit: The IRS may choose to audit your company's worker classifications.
Employee lawsuits
Misclassified security guards may sue their employers to recover unpaid wages and benefits they are entitled to under employment law. This could include:
- Overtime pay: In most states, security guards who work more than 40 hours a week in a workweek are entitled to overtime pay at a rate of one and a half times their regular hourly wage.
Misclassification could lead to lawsuits demanding unpaid overtime compensation for all hours worked over 40 per week.
These lawsuits can be costly, as the security guard may also be entitled to attorney's fees on top of the unpaid wages.
- Benefits: Security companies may offer benefits like health insurance, paid time off, or retirement contributions to their employees.
Misclassification would deny guards access to these benefits, potentially leading to lawsuits to recover them.
These are just some of the potential consequences of misclassifying security guards. The financial penalties and legal risks can be significant, making it crucial to ensure your security guards are properly classified as employees.
Can a security guard ever be a 1099 contractor?
The IRS regulations for worker classification are strict, and security guard roles very rarely qualify for independent contractor status.
However, there could be some limited scenarios where a 1099 classification might be defensible. Here are some key requirements such a situation would need to meet:
- Highly specialized security consultant: A consultant brought in for a short-term, specific project with a unique skill set they independently apply (think event security expertise for a one-time security assessment for a concert).
- Independent services: Another possibility might be a situation where a licensed individual runs their own independent service, offering services to various clients on a contract basis and setting their own schedules and protocols.
However, consult with a legal professional to ensure compliance in such a scenario, as it's a significant legal gray area.
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