Bring a tenant on as a part time employee?

[Judd Campbell]

I have a guy that I have used as a casual handyman for the past 18 months.  He lived a few houses down from a property I bought in early 2014.  He is a single guy that lives very close to the edge financially.  He works odd jobs for people in the area and seems fine making ~1k / month.  He currently has no car.  I moved him in one of my rentals that needed some work. (leaking roof, new floors, new doors, paint, drywall, a few windows, etc. ) Market rent is $700 for the place but in exchange for the labor I cut the rent in half the first year and have it increment up $75 / year until we hit market rent. 

I pick him up on Saturdays and we do work for 4-10 hours  when I have something going on. 

I want my Saturdays back with my kids.  I was debating getting him a $500 car, a mobile phone, free rent, and $400 / month to cover his phone, insurance, and fuel. 

Trustworthy guy, he has been to my house multiple times to help me work there. 

I would be 1099'ing him for the $1100 / month and with the car he could work other jobs as well to make more money.  

I would have him do repairs, show units, turn units, & take phone calls from current tenants and prospective tenants. 

I would still want to do the background searches on the applicants and do the finances.  

He would be working 3-5 days a month most months.  as I buy other properties he could have more extensive projects.    

As a data point I have 20 units and they are all within 20 min of his location. 

Would I need to get workers comp  or liability insurance for him?  How about withholding? 

I want to set him up with a bank account and an email, he currently has neither. 

Guy is mid 50's.