The IRS rule is that if you pay a contract laborer more than $600 per year, you need to file a 1099. There is an exception for private household but I don’t remember what it is.

My feeling is that wages in the construction and related service (ie cleaning) industries have been rising because of the housing boom. More workers are needed to build and service all those new homes. Those wages will be depressed with the coming crash, but there’ll be a lag time. If everyone is busy, it’ll cost your more if you want the services now…. Remember, there are plenty of homes on which finishing touches need to be applied. When people move and sell they need to have their homes serviced.

I don’t think it’s too much for a cleaning person to charge $18/hour. Remember that cleaning person does not have a full schedule and needs to market himself like a business. A technician might make $18 working at a job full time. But if you want that technician on a private contract to come fix your computer at home, it’ll cost you about $125/hour. If you want him at night, it’ll cost you $200+/hour. You cannot compare an independent contractor to an employee. You have to think about the net income each worker gets. A contractor is like a business with revenue, minus expenses equals net income. If a business is busy, they’ll charge more to fit-in a client to make up for when they charge less when it’s slow.

My brother who is in the service business says that when he’s busy, he charges more when someone wants something immediately… He has different prices: the regular price, the nice-person price, the right-now price, and the pain-in-the-ass price.