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. And the old industry-standard way of dealing with work campers, an arrangement might’ve 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. We’ll talk about some pitfalls with that. You have to be really careful how this is handled in the litigious society that we are in today. People sue about anything.
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. Workers’ compensation insurance is a big issue and this is where the problem starts to unravel.
Work campers should be paid and should be reported to your worker’s comp. You not only have to pay that on employees, but you also have to pay it on any subcontractor or any contractor who’s working in your park who doesn’t have their own insurance. That includes work campers.
The second problem 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, 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, these are employees. If you are dictating when they work, how they do their job or what tools they use to do their job, that’s the definition of 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? Treat them equally. They’re employees all day long. 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. First, if you have a workers’ comp claim you’re not going to like the outcome of that. Next, 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 or retirement plans that you would otherwise offer to employees.
Next up, unemployment. 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 have very low shot at doing that.
Let’s start the world fresh again with RV parks and campgrounds. Treat your work campers as employees.
Some mention 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.
Let’s put those work campers on the payroll and treat them properly. Eliminate the hassles of having these risks as standing for your park, and we’ll move forward from there and make your park even more profitable and investible for other people if you want to sell it in some stage.
Donna Bordeaux, CPA with CampgroundAccounting.com
What happens when you send two CPAs out into the relaxing outdoors to camp? You get CampgroundAccounting.com. Donna and Chad have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They camp and travel across the country every chance they get, so it’s just a natural fit that they focus their CPA skills on helping campground owners throughout the USA grow their businesses and minimize the impact of taxes. They understand the key performance indicators and specialized issued that face RV park owners every day.