The Shed Industry Has a People Problem Nobody's Talking About
If you're in the shed business: building them, selling them, hauling them across three states on a lowboy at 6 a.m. - you already know that running a tight operation is harder than it looks from the outside. The product looks simple. The business is anything but.
You're managing a workforce that's part 1099, part W-2, part Amish, part Mennonite, and sometimes can be part "I'll show up when I show up." You've got haulers who are independent contractors in every sense of the word, builders who work in crews that don't use smartphones, and yard guys who get paid in cash on Friday. And somewhere in the middle of all of that, you're also trying to grow a business, keep customers happy, and not get sideways with the IRS or the Department of Labor.
Sound familiar? Let's talk about it.
The 1099 Question Is Getting Louder
Most shed companies rely heavily on independent contractors, and for good reason. The flexibility is real. You don't need a full crew every week, haulers run their own rigs, and build crews often operate as their own units. It makes operational sense. But here's the honest truth: the worker classification rules haven't gotten more lenient. They've gotten stricter. The IRS and the Department of Labor both have tests they apply to determine whether someone is truly an independent contractor or whether they're functioning more like an employee. And the penalties for misclassification aren't small. That doesn't mean you need to convert everyone to W-2 employees. It does mean you need to know why your classification decisions hold up - and have documentation to back it up.
A few things worth reviewing:
Does your contractor set their own hours and methods? Or do you tell them when to show up and how to do the work?
Do they work for multiple clients? A hauler running routes for three different shed companies looks very different than someone who exclusively hauls for you every week.
Do you provide their tools or equipment? (This one matters more than people think.)
Getting this right isn't about being paranoid. It's about being protected. If you’d like a free resource (keeping in mind I’m not an attorney) that goes a bit deeper, you can visit this link.
Working with Amish and Anabaptist Crews - Practically Speaking
Many shed builders and distributors in the Midwest, Southeast, and Mid-Atlantic work closely with Amish and Mennonite craftsmen, and for good reason - the quality of work is exceptional and the work ethic is extraordinary.
But there are some legitimate operational and compliance nuances that don't get talked about enough:
Social Security and Tax Considerations Members of recognized Amish and certain Anabaptist communities who are self-employed may qualify for an exemption from Social Security and Medicare taxes under IRS Form 4029. This exemption applies to their own self-employment taxes - it doesn't automatically exempt you as the employer from all obligations. If you have Amish workers on payroll (W-2), there are specific provisions worth understanding. This is one area where a quick conversation with a payroll specialist or HR advisor can save you a significant headache.
Payment Preferences and Recordkeeping Cash payments are common in these communities and are completely legal, but they still need to be documented. Every payment, regardless of form, needs to be tracked, recorded, and reported appropriately. "We paid him cash" is not a defense in an audit. Keep records. Issue 1099s when applicable. It protects you and the worker.
Scheduling and Religious Observance Amish and Anabaptist workers typically observe the Sabbath and may have church-related commitments that affect availability during certain seasons (barn raisings, harvest, community obligations). Building that into your scheduling expectations, rather than treating it as a surprise, goes a long way toward maintaining strong working relationships and mutual respect.
Technology and Communication Most traditional Amish craftsmen don't use smartphones or email. If your onboarding process, timekeeping, or communication systems assume digital access, you've already created a friction point. Think through how your processes accommodate workers who communicate differently. It's a solvable problem, but you have to solve it intentionally.
What "HR" Actually Looks Like for a Shed Company
Here's something I hear from small business owners in trades and specialty industries all the time: "We don't need HR. We're not big enough." I'd push back on that - gently, but firmly. You may not need a full HR department. But every business that has people working for it (in any capacity) has HR. The only question is whether yours is intentional or accidental. Accidental HR looks like this: you hire someone because they showed up, you pay them however felt right at the time, you never wrote down what you expected of them, and when something goes wrong you're not sure what your options are.
Intentional HR looks like this: you know why each worker is classified the way they are, you have a basic onboarding process that sets expectations, you understand what's required of you under federal and state law, and you're not flying blind when a conflict or compliance question comes up. You don't need a 200-page employee handbook to get there. You need the right foundations.
A Few Things Worth Putting in Place This Year
If you're a shed company owner reading this and thinking "okay, some of this applies to me" — here's a short list of places to start:
Audit your worker classifications. Know why each person is a 1099 vs. W-2, and document it.
Get a basic independent contractor agreement in writing. Even a simple one beats a handshake when things get complicated.
Make sure your cash payment records are clean. If you're paying contractors in cash, track every payment.
Understand your state's specific labor laws. Missouri, Indiana, Ohio, Pennsylvania — they're not all the same.
Think through how your processes accommodate workers who don't use technology. Onboarding, timekeeping, communication - all of it.
Talk to someone who knows this space. Not a generic HR consultant who's never seen a build crew. Someone who understands trades, small business, and the real-world complexity of a workforce like yours.
The Bottom Line
The shed industry is full of hardworking people running real businesses, and they deserve the same quality of operational and people support that bigger companies take for granted. The complexity of your workforce isn't a liability. It's just something that needs to be managed well. If you've been winging it on the HR and compliance side, you're not alone - and you're not in trouble yet. But there's no better time than right now to get your foundations right.
That's exactly what we help small businesses do at Salt & Light Advisors.
👉 Ready to get your people operations sorted? Let's talk.
And shoutout to Shed Geek for having me on their show recently. I’ll be sure to promote the episode as soon as it launches because you won’t want to miss our conversation on HR and the shed industry.
