[posterchild]

Could you start a second company with new employees and have your first company contract services from your second company?

[Abathar]

I believe that loophole was already filled when they wrote the law, two separate companies with the same owner counts together towards the 50, if I understand it correctly.

[JerseyHighlander]

“Could you start a second company with new employees and have your first company contract services from your second company?”

The general answer is No, with exceptions.

A contracted worker, a subcontractor, a day laborer, etc, all have been defined under IRS regulations, as well as the distinctions between the different definitions of employment... this has already been through the IRS auditing process (before ACA was made law), and civil and (even a few criminal) court cases.

[Aliska]

Or you could hire the new employees as contractors and they'd get 1099's at the end of the year instead of W-2 wages. IOW they would be self employed.

I think there are some categories of employees where you can't do this, and your new employees would be responsible for paying SS self-employment tax, estimates for federal and state income taxes, and purchase their own medical plans. Possibly more requirements to be met.

I wouldn't go down that road unless I'd gotten solid legal advice. Also, there is info about it somewhere on the IRS website.

[Vigilanteman]

I think that would be the safe way to go. I spent eight years in Japan working for a big Marquee Name company and this is how they handled it. Not to avoid ObaMaoCare, but to avoid inflexibilities and unfavorable tax treatments in some work force contracts related to full-time employees of the parent organization.

Subcontractors and transfers to subsidiary organizations has been a trick used by Japanese companies for over 30 years to avoid outright workforce downsizing. They have a funny reaction in their stock market in that laying off employees is seen as a sign of weakness and bids their price down. Transferring them to a subsidiary, not so much.

[Tenacious 1]

Could you start a second company with new employees and have your first company contract services from your second company?

I know someone who has done exactly that, successfully. After we went through it, he proved (at least to me) that is was legal and proper in this state.

[ridesthemiles]

IF they are looking for a job & don’t realize that 40 hour weeks are not being used under Obama, they are too stupid for your wife to want to hire them.

This current economy isn’t going to support a person who demands a 40 hour week. They will be lucky to find 2 .. 20 hours a week jobs.