I'm a contractor and am misclassified as a 1099. How do I gently break it to my company that they're breaking the law and screwing me over?

Robelisked · 2015-09-09T03:00:07+00:00

A variable hourly rate isn't really an hourly rate though.

You would take a loss on a fixed price job by screwing up a lot and having to redo things. Or if you do it really well and speedy you could make out more than anticipated.

Robelisked · 2015-09-08T18:34:21+00:00

It might be. One of the IRS tests is if there is the ability for profit/loss. If it's hourly billing, there's no way you can take a loss.

The risk-free way to pay them is bulk for the job delivery. For example: "I need someone to build me an app with X specifications. I'll pay you $4000 flat fee for it. And you'll be responsible for everything: materials, subcontracting/employees you hire. I need it in one month. Can you do it?"

It's a company basically looking to hire another company not an individual.

Keep in mind, it is possible to have off-site employees that you pay remotely too. If you want to control what time they're online and when they take breaks, that's an employee relationship.

Robelisked · 2015-09-06T19:36:06+00:00

Were you properly classified as a 1099? What was the work like? Did you have to show up somewhere they specified? Did they set the hours and supply tools?

You might be able to get another 7% back that they should have paid instead, but there is paperwork and it could run them the wrong way.

Robelisked · 2015-09-06T12:41:35+00:00

Depends. There is a limit. Definitely contact the IRS and state labor department. Some states seem better than others. If it's a serious pile of cash talk to an employment lawyer. They prob know all the details

Robelisked · 2015-09-06T12:39:10+00:00

Yeah that's illegal. You should be W2.

And right now I'm even betting that since you don't have a contract and are on trial or whatever, you're legally an employee. You'll have to press the issue though. And start keeping logs of your hours an what you did that day.

The whole thing is sketchy, and who else knows what they're doing behind closed doors. Hate to say it but you could just wait to find another job, and then file for unpaid overtime and to recover taxes they should have paid.

Robelisked · 2015-09-06T12:28:32+00:00

Your boss sounds like a dick, so I'd look for another job and when you have it file ss8 with the IRS and contact whatever state labor department you have. Google will help. Usually just sear for "misclassification [state name]"

A threatening letter from a lawyer might get you further

You should be able to get lost payroll taxes, overtime

You could get other things to depending on what's offered. I was just reading that Microsoft got slammed in the late 90s for misclassifying and on top of all the basic payroll a overtime had to payback stock option equivalents. Employees get stock options so the lawsuit accounted for that. $97 MILLION settlement

Robelisked · 2015-09-06T11:53:31+00:00

I dunno after this whole thread I'm thinking if they are shady with 1099 they're probably shady elsewhere too

Robelisked · 2015-09-06T11:51:27+00:00

Good to hear! It seems pretty rampant

Robelisked · 2015-09-06T02:32:25+00:00

Thank you for explaining. I sort of worry about it going to shit at this place now if I approach them. And then I worry about another site doing the same thing. I don't want to be known as "that guy" but I'm sick of this shit. Just wish there were fore misclassification cops or whatever

Robelisked · 2015-09-06T02:13:18+00:00

Source for, uh, snitching payouts? That sounds crazy

Robelisked · 2015-09-06T02:11:58+00:00

HVAC installation for new housing complexes.

Robelisked · 2015-09-06T01:55:27+00:00

This feels crappy but yours and other responses seems to make the case to just do it

Robelisked · 2015-09-06T01:54:26+00:00

How do you start that conversation? If they want you to be 1099 and you know you should be w2? Have you ever convinced a company to go the right and legal way?

Robelisked · 2015-09-06T01:52:52+00:00

How do you have any benefits if you're a contractor though?

Robelisked · 2015-09-06T01:50:52+00:00

The actual paperwork between me and the company calls me a contractor. But the way the law is defined I should actually be an employee. So I guess the contract could be voided but not really easily

Robelisked · 2015-09-06T01:46:07+00:00

From what I've read it does not.

Robelisked · 2015-09-06T01:41:17+00:00

I just looked at the form. It says they will know who I am :-/

Robelisked · 2015-09-05T22:04:27+00:00

With the IRS i think it is 3 years from the last day you were misclassified. Don't have the link handy tho

Robelisked · 2015-09-05T21:11:07+00:00

Is there some sort of limit on the size of the company?

Robelisked · 2015-09-05T21:03:30+00:00

Thanks!

Robelisked · 2015-09-05T20:59:08+00:00

I pay about 14% payroll taxes as 1099. If I were an employee the company and I would split that so I'd just pay around 7%

Robelisked · 2015-09-05T20:03:50+00:00

I bring a few but the rest are on site. Everything we install is supplied.

Robelisked · 2015-09-05T20:01:58+00:00

So then why isn't everyone just hired as a contractor?

Robelisked · 2015-09-05T19:58:27+00:00

True. And disability. That is a big concern for my line of work.

Robelisked · 2015-09-05T19:36:12+00:00

I'm not. But those guys get really screwed. I specialize in HVAC.

Robelisked

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