Are you paying someone to provide security services? Are they licensed in Indiana as a Security Guard Agency?
Are your officers or security company covered? Is the individual officer covered? Why does it matter?
Are your officers or security company hiring employees or contractors? And why does it matter?
Upside Event Management is a licensed Security Guard Agency by the Indiana Professional Licensing Agency under license #SG22000028. An individual or company that is hired to protect persons or property in Indiana MUST be licensed as a Security Guard Agency, under Indiana Code § 25-30-1.3. Just because a company uses off-duty law enforcement officers to provide security services does not mean they are licensed. Also, just because the individual is a law enforcement officer does not wave or exempt them from the necessity of holding a Security Guard Agency license. The applicable exemption is while engaged in the performance of the officer's official duties, Indiana Code § 25-30-1.3-6(b)(1).
My company is looking to or currently hire off-duty police officers for security functions. If you currently employ officers directly or through a "security" company, check to make sure that individual officer or company is licensed and insured. If they are not, check with your legal counsel for ramifications. If you are looking to hire off-duty officers, contact Upside Event Management for your no worries solution.
I am an officer that is hired by a bar or retail store directly to work police details. I am an officer that works for a security company. Both of these statement are required to be licensed. If you work directly for a company, for cash or 1099-NEC, you must be licensed yourself. Now if you work for a company directly and paid as an employee (W2), you and the company do not have to be licensed. For example, the Acme Company wants you to stand at the front door and you are paid as an Acme employee with tax withholding, then no licensing is required. If you work for a security company, check to make sure they are licensed. See link below to search for licensed companies. If they are not licensed, continue reading this page for additional considerations such as legal liability. If you are hired by a security company, however, you are paid on a 1099-NEC then you must be licensed yourself as a security guard agency. You are a contractor for that security company. See section on employee vs contractor and the Indiana Code listed below. *These statements are not legal advise. As always check with your legal advisor.
Indiana Code § 25-30-1.3-7 "Necessity of license": A person may not: (1) engage in business as a security guard agency; (2) solicit or advertise for business as a security guard agency; or (3) represent or hold a person out as a security guard agency; unless the person is licensed as a security guard agency under this chapter.
Indiana Code § 25-30-1.3-5 "Security guard agency": As used in this chapter, "security guard agency" means a person that is in the business of providing, for hire or reward, a guard or other individual to: (1) protect persons or property; or (2) prevent the misappropriation or concealment of goods, wares and merchandise, money, bonds, stocks, choses in action, notes, or other valuable documents or papers.
Indiana Code § 25-30-1.3-4 "Person": As used in this chapter, "person" means an individual, a firm, a company, an association, an organization, a partnership, or a corporation.
(Field Key: Profession= Private Investig & Sec Guard. License Type= Security Guard Agency. County= Allen)
Known licensed security guard companies owned by active law enforcement officers in Allen County:
Covert Surveillance Investigations, Inc. - ACPD Supervisor
Tactical 87 Security & Investigations - FWPD Officer
3 Rivers Security LLC - FWPD Officer
Upside Event Management - FWPD Supervisor
(As of 1/2021)
Upside Event Management, a subsidiary of Upside Events & Catering, LLC., holds liability insurance policies as a Security Guard Agency and an Emergency Medical Service. As required by law, Indiana Code § 25-30-1.3-16 (b), a security guard agency (1) must cover damages that the insured becomes legally obligated to pay for bodily injury or property damage proximately caused to a person by the insured in conducting business as a security guard agency; (2) must include coverage for: (A) false arrest, detention, or imprisonment; (B) malicious prosecution; and (C) wrongful entry or eviction or other invasion of the right of private occupancy; and (3) may not exclude coverage for an intentional act taken by or at the direction of the insured that results in bodily injury, if the injury arises solely from the use of reasonable force to protect persons or property.
Being a licensed Security Guard Agency insures that those employees and the company are covered. All law enforcement agencies in Allen County require officers working a part-time detail, moonlighting, to have a signed Release/Indemnification/Hold Harmless Agreement by the officer and employer. This document indemnify and hold harmless the agency and its governmental authority from and against any present or future claims, including claims of negligence, losses, liabilities, claims (including claims against constitutional claims) injuries, death and/or damages that may be sustained or caused that may result from the employer's hiring and/or use of an off-duty officer while such officer is acting as an agent, contractor or employee of the employer. The officers' release shall include, but not be limited to, injuries to person or property the officer sustains or incurs, or for which the officer may be liable to any other person, as a result of their duties stemming from their off-duty employment. *See specific law enforcement agencies document for details.
Why is this document important for those looking to hire officers? If your company hires an officer directly on a 1099-NEC, most likely that individual officer does not have supplemental liability insurance for their security actions. If your company hires a company or LLC that employs officers, which is not licensed, ensure that its insurance policy covers those items listed above; such as bodily injury, property damage, false arrest, wrongful entry, and malicious prosecution to name a few. Ask your company providing officers if they employ (W2) or subcontract (1099-NEC) their officers. Some liability insurance policies do not cover contractors, if using contractors ask for their policy language. The company might be covered, however, the actual person who performs the act that places your company at risk is not covered. Hiring a licensed security guard company that hires direct employees, such as Upside Event Management, avoids all of these risks and headaches.
Employee vs Contractor
What does the IRS say on how to determine when an individual is considered an employee or contractor. "An individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done.", Internal Revenue Services Understanding Employee vs. Contractor Designation. The IRS looks at three categories to determine a workers classification; Behavioral Control, Financial Control, and Relationship to the Parties. If an individual is told when to arrive and when to leave, what tasks are to be completed or how they are to be completed, they are an employee. That person should then receive a W2 and not a 1099-NEC. What do the courts say? Review a February 2019 U.S. Court of Appeals for the 6th Circuit case out of Louisville, Kentucky: Acosta v. Off-Duty Police Services Inc., 6th Cir., Nos. 17-5995/6071. A local police officer stated, "other officer operated companies (non-licensed) pay on a 1099.". Well, at Upside Event Management we strive to follow all laws and governmental guidelines.
Are you a company that hires officers directly for security? If an officer is hired as a contractor (1099-NEC) that individual officer must be licensed as a Security Guard Agency, see Indiana Code § 25-30-1.3. Which that individual officer would need to obtain liability insurance. It is safe to say that most officers you are hiring on a 1099-NEC are not licensed or insured. Did your company sign a Indemnification/Hold Harmless Agreement form? If so, check with your legal counsel, but you hired an individual that has no insurance and the company indemnified the officers agency. Who's has the legal liability now? Select Upside Event Management and put your worries to bed.
Why do "security companies" or general companies pay on a 1099-NEC? There are several benefits for a company to pay on a 1099-NEC. They don't have to pay: liability insurance on the officer, workers compensation insurance, unemployment benefits, FICA (Federal Insurance Contribution Act) tax, or withhold federal/state/local taxes. If your an officer working for someone on a 1099-NEC, you should be asking who is covering my liability insurance if I am sued, or workers compensation if I get hurt doing ordinary task; such as walking around the building. The realistic answer is no one. What about when taxes are due! The 1099-NEC individual is responsible for paying the 15.3% self-employment tax, which is essentially the full FICA tax amount. As an employee, the company pays 7.65% of that FICA tax and you are responsible for only 7.65%, not the full 15.3%. In addition unless you set money aside, you will then have the full federal tax, state tax, and local tax be applied, since tax withholding is typically not conducted on 1099-NEC. Plus, if you did not file estimated taxes quarterly and you owe more than $1,000 in taxes you can be penalized. *See IRS publication 505 and consult your tax advisor for details. The easy answer, make sure you are employed by a licensed security guard company and being paid on a W2. Like we do at here at Upside Event Management.