I was hired by a company in Montana about 6 years ago, and I was a full time employee salaried employee with benefits. I moved to Washington state about 2 years ago at which time I was put on payroll of a Seattle based company my employer also owned. I recieved the same salary and was moved to the Seattle based companies group health plan.

About 14 months ago, the Seattle based company was disolved and I was their only employee. The group health plan was not renewed, so the company asked if it would be okay to treat me as an independant contractor and pay my monthly salary in cash. I agreed. They also offered to reimburse me for health insurance.

The accountant at this company claims that in order for her to pay my unemployment insurance and SS taxes, that my employer would have to be legally setup to do business in Washington State. Is this true?

I was under the impression that my unemployment insurance was being paid by my employer, but that hasn't been the case.

I have been paying all my Self Employment taxes on time.

What are my rights to Unemployment insurance. Is there any way for me to pay the insurance premiums?

Thanks,

Robert

http://fortress.wa.gov/esd/portal/resources/wac/wac300.htm
JoeC

In order for you to get UI benefits, you have to have sufficient reported wages in the "base period"; in most states, that is the last four calendar quarters previous to the quarter in which you were terminated less one.

Here's the problem. You agreed to be treated as an independent contractor. Horse out of the barn now but, to be frank, if you didn't know the ramifications of doing so (no UI insurance, no SS taxes deducted, no benefits), you probably shouldn't have agreed so quickly to be paid, what very well may be considered "under the table". Now, having said that, if you don't meet the criteria to be properly classified as an IC, then you have an issue that can be reported to the state DOL (to start). This would most likely be true if you were doing the same job you were doing when you were an employee.
http://www.irs.gov/taxtopics/tc762.html

However, the employer is only partially correct about the state employer status. If the employer has a federal ID number (TIN) and you are being treated as an employee, then they MUST deduct federal income tax, FICA, and Medicare taxes (whether they are ALSO registered as a Washington employer is irrelevant for federal taxes). If you are an employee, then the employer has a "place of business" (even if that is your home), and they MUST register as an employer in Washington (assuming your home is in WA). What state ARE they registered in (they have to have one).

And, as an IC (rightly or wrongly), you cannot cover yourself for UI unless you have a business and it is of the proper legal type, for which you would need to see an attorney.

I'm not sure what you mean by reported wages. I have paid all my taxes quarterly.

Yes, my empoyer has a registered business in both Montana and California. I was hired in Montana, then moved to Washington, where they moved me to Washington company's payroll. The Washington company no longer exists, so I was asked to be made an independent contractor.

Washington has no state taxes, are you saying they can still pay all my federal taxes if they have a federal tax Id, which I'm positive he does?

Thanks,

Robert

"Reported wages" is not something you do, and has nothing to do with paying your taxes.

Every quarter (at least, it's quarterly in every state I know) the employer submits a report to the state listing the wages of their employees and making payment to the UI fund. That's what's used to determine your eligibility for UI and what dollar figure you receive.

Yes, my empoyer has a registered business in both Montana and California. I was hired in Montana, then moved to Washington, where they moved me to Washington company's payroll. The Washington company no longer exists, so I was asked to be made an independent contractor.

Washington has no state taxes, are you saying they can still pay all my federal taxes if they have a federal tax Id, which I'm positive he does?

Thanks,

Robert

Was the Washington company a separate company? Or was it the same company that just closed business in Washington (and continued to operate in California and Montana? What company (if there was more than one) is now paying you?

Yes, the Washington company was a seperate company. When the change initially happened, I was paid through my bosses personal account. Now the checks appear to be from the montana company that originally hired me. I'm afraid I can't get any more specific with naming names.

Thanks for all the information and happy holidays!

Robert

I don't know what to tell you except to file a civil claim against, probably, the owners, personally. Or the company that is paying you now.

This is getting much more complicated than what can be resolved on an internet bulletin board by strangers. Best advice I can give you is to speak with an attorney. ;)