How to Setup and Process 1099/Vendor Checks (Subcontractor)

1099/Vendor Setup

There are two types of vendors / subcontractors: 3rd party staffing agencies and 1099 employees. In both cases, the client is not responsible for the taxes of the employee. In the case of the 3rd party agency, the client pays the agency and that agency is responsible for paying and preparing W2s for the employee; in the case of the 1099 employee, the client pays the employee but the employee is responsible for its own 1099.

Note: The difference between 1099 employees and staffing agencies is the Pseudo AIdent. Staffing agencies have one; 1099 employees do not.  Once a Pseudo AIdent is created, the only way to remove it from the vendor is to NULL it out in SQL (this is done by support on the backend).

1) To create vendors, go to All Options --> Vendors and select the + sign in the upper right-hand corner


 
 2) In the Vendor Quick Add pop-up
           a. Fill in the Company ID and the Fully Company Name with the name of the company. The Company ID has a limit of 15 characters.
           b. In the Company Type List, choose "Vendor"
           c. Pay Delay: Fill in "0"
                     i. This field is to delay paying the employee until the customer has paid the invoice. This situation is rare because, obviously, the employee needs to be paid.
           d. Fill in the Corporate Address.
                     i. If the Local Address and Remittance Address are the same as the corporate Address, you can select the Copy icon, and the Local & Remittance Addresses will fill in automatically.
                     ii. If they are not the same, fill in the Local & Remittance Addresses manually.


 
 3) You are automatically brought to the Details page for the new vendor.
           a. For 1099 employees, on the right-hand side, "Is Vendor" and "Generate 1099" are checked.
           b. For staffing agencies, on the right-hand side, you can uncheck "Generate 1099" if the client does not want to file a 1099 for the staffing agency.
           c. Under Vendor / Subcontractor Setup on the left, in the field Pseudo AIdent, click the profile icon to create a Pseudo AIdent. Then, you can click it again to view the Pseudo Aident's record (remember Pseudo Aidents are only for the staffing agency).


 
WARNING: The new vendor will only show in drop-down lists after your login credentials have been refreshed, so either refresh your hierarchy or log out and back in again.

4) For independent contractors (1099 employees), do not create a Pseudo Aident. Instead, create an employee profile in the same way that you would for a W2 employee. Because the client is not responsible for taxes, the SSN and address are not important. (The SSN will fill in with all 0's.)
           a. Under Details on the new employee, on the right-hand side, in the field for Vendor, select the vendor that corresponds to this employee. On the Avatar will appear an icon labelled "Subcontractor."


                    i.    If you create an assignment for the 1099 employee without filling in the Vendor field on the Employee profile, you will create an assignment whose timecard will be for a W2 employee, and you cannot change it back. You will have to close the assignment and create a new one from a profile with the correct information.

Note: When creating an assignment for an employee with a vendor, any assignments created for that employee will not have the W2 box checked under their assignment details record.

 

5) For staffing agencies, set up a contact by creating one in the usual way, and under Contact Details, fill in the Vendor field with the staffing agency. From the Actions menu, invite the contact to WebCenter. The only WebCenter role available is Vendor.

Note: The contact cannot be linked to both a customer and a vendor; you will get an error.



6) For staffing agencies, you can link them either to the customer for whom they will be providing employees or, more specifically, to the order that they will be filling.
           a. To link them to a customer, go to the customer Details --> Vendor Management and add the staffing agency.
                     i. Choosing a Job Title will limit the orders that the vendor is automatically applied to.
                     ii. The Order Delay (Hours) specifies the amount of time the client has to fill the order before the vendor has access to it.


 
 7) When you create the order, the status of the vendor will update from "Waiting for distribution" to "Distributed" after the allotted delay. If the delay is 0 hours, then you must manually update the status to "Distributed." However, the When Visible field will override the Status field.
           a. The Max Candidates Per Req determines exactly how many employees can be provided by the vendor on the order. If you specify it on the Customer, the vendor will only ever be able to provide this many employees, even if you change the amount on the order. Therefore, put 0 to allow yourself freedom later.
           b. If you only want to link the vendor to specific orders, then you can add the staffing agency under Order Details --> Vendors.
           c. When the vendor contact sees the order in WebCenter, he will have the ability to Accept or Reject w/Reason. The service rep will be alerted of the decision by email, and the vendor's status on the order will be updated. The vendor can create employees under the Employee tab and can then return to the order to add the employee to the order. Their creation / addition is all reflected in Enterprise.


 
 8) When it comes time to process payroll:
           a. For a 1099 employee, process them through a SubPay payroll run type.


          b. For a staffing agency, you will ultimately process the check through a SubPayCons payroll run type.  First, however, you need to run the employees' checks ("pretend" checks, because you're not actually paying the employee) through a payroll run type of SubPush. Doing so creates a record of the check in our backend tables, and the check is logged in the employee's check history. These transactions must be fully posted before you can run them through a SubPayCons payroll run, which means that not only must they have payroll & invoice complete, but any other transactions for those employees (e.g., for other customers) must also be payroll & invoice complete because all proofed transactions for an employee must be posted together. 


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