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Paying Day Laborers and Temp Crews: What's Legal, What's Risky

What moving companies need to know about legally paying day laborers, temp agency crew, and short-term help.

Moving Company Hustle·July 21, 2026·4 min read

The two legitimate paths

There are really two compliant ways to bring in extra help: hire them directly as short-term W-2 employees, or go through a licensed temp staffing agency that handles their payroll and insurance as the employer of record. What's not a safe middle ground: paying cash to someone you found informally and calling them a 1099 contractor while directing their work like an employee.

Why the "cash day laborer" model is risky

  • If you're directing when, where, and how they work, they're functionally an employee — regardless of payment method
  • Cash payments create no tax withholding record, which becomes a liability if the worker is ever injured or the arrangement is questioned
  • They're typically uninsured under your workers' comp policy if not properly classified
If you use a temp agency instead

Confirm the agency actually carries workers' comp for the workers they send you — some smaller agencies don't, which shifts liability back to you if someone's hurt on your job site.

Ready to stop doing this by hand? See how Gusto handles it automatically for a moving crew.

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FAQ

Is it legal to pay day laborers in cash?
It's legal to pay in cash, but the payment still needs to go through proper payroll reporting and tax withholding if the worker is functionally an employee — informal, unreported cash pay is what creates legal risk.
Are temp agency workers covered by my workers' comp policy?
Usually not — a licensed temp agency typically carries its own workers' comp coverage as the employer of record. Confirm this before the job, not after an injury.
Can I treat a day laborer as a 1099 contractor?
Generally not if you're directing their schedule and how the work gets done the same way you would an employee — see our full breakdown of 1099 vs. W-2 classification.
Tags:payrollmoving company payrolllaborerstempcrews

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