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1099 Employee? California

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  • 1099 Employee? California

    I had a question, What is a 1099 Employee?

  • #2
    Legally, there is no such thing as a "1099 employee". All workers are legally either employees or independant contractors. You might find the following article of use.

    http://payroll-taxes.com/articles/art2.html
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Well what about Contract Employee?

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      • #4
        "Contract employee" is another made up phrase that means whatever you want it to. If we are talking actual laws, then under both the federal Internal Revenue Code (IRC) and Fair Labor Standards Act (FLSA), all workers are either employees or independant contractors. IRS and DOL have similar but not identical legal defintions of these phrases.

        A "1099" is a tax form that (among other things) is issued to independant contractors to report their annual gross income paid by their customers (independant contractors are not employees and do not have employers). Employees get their wages (another legally defined term) reported on IRS form W-2 by their employers.

        Either employees or independant contractors can have contracts, although most employees do not have contracts. More over, employees fall under something called labor law while independant contractors fall under contract law.

        Phrases like "1099 employee" or "contract employee" are legally strange, partially because they are not actually defined anywhere in the law, but also because they seem to be trying to blur the legal distinction between employees or independant contractors.
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

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        • #5
          "Contract employee" has another meaning besides being a misnomer for an independent contractor. The term is used interchangeably with the term "leased employee" to mean a person who works at one company but is a common law employee (a real W-2 employee, not a "1099 employee") of another company that has contracted with the first company to provide personnel to the first company. For example, Company A contracts with IT Company to provide all IT needs of Company A. Company A pays a fee to IT Company and IT Company hires staff (often the staff who used to be in the IT department of Company A before the services were outsourced). The IT staff show up at Company A every day, park in the employees' lot, eat in the employees' cafeteria and go the the Company A picnic. They may never meet another employee of IT Company other than the ones they work with at Company A.

          It is common to call those employees "contract employees."
          David K. Staub (www.illinoisbusinessattorney.com)
          Forum posts are not legal advice, are for informational and educational purposes only, and are not a substitute for proper consultation with legal counsel.

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          • #6
            Fair enough. I have heard that. I have also however heard of day laborers paid cash under the table and people paid by check directly by the company and reported on 1099s at year end refered to as "contract employees". We get questions from people on this website who receive 1099s from their "employers" who think that they are "contract employees".

            The problem with non-legal terms is that they mean whatever the person using the term wants them to mean. I rather prefer the term "leased employees" myself because it seems to have fewer alternative meanings. But even that term seems to have some give in it, and a degree of legal nuance, what with the legal possibility of "co-employers" and such.
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)

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            • #7
              dis.vet seeking help

              I work for a company that well we deal in lead products; I am the Manager of field operations, I had aquired a hernia from the moving and lifting of product. And in result had to have surgery and also am out of work for 4 weeks. I was told that I was going to be going on to 1099 or Independant contractor and I was to be saving my reciepts for taxes but he would let me know when that was going to start. One week later is when I went into the hospital for the hernia. Waiting for my surgery date I was told since i am on light duty I would begetting half pay.(I raised a stink and got full pay for that one week), But I was told he did not have to pay workmans comp because i am 1099ed; When I brought it to his attention that I had not started that part yet he told me it was all the same. Also I found out I have to pay for the surgery and everything that goes with it. So here is my question; Is that legal? And with out getting anyone into trouble can you show me a road of avenue that I am missing and open my eyes to it.
              Thank you Greatly
              Dave.

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              • #8
                Originally posted by dhamburg View Post
                I work for a company that well we deal in lead products; I am the Manager of field operations, I had aquired a hernia from the moving and lifting of product. And in result had to have surgery and also am out of work for 4 weeks. I was told that I was going to be going on to 1099 or Independant contractor and I was to be saving my reciepts for taxes but he would let me know when that was going to start. One week later is when I went into the hospital for the hernia. Waiting for my surgery date I was told since i am on light duty I would begetting half pay.(I raised a stink and got full pay for that one week), But I was told he did not have to pay workmans comp because i am 1099ed; When I brought it to his attention that I had not started that part yet he told me it was all the same. Also I found out I have to pay for the surgery and everything that goes with it. So here is my question; Is that legal? And with out getting anyone into trouble can you show me a road of avenue that I am missing and open my eyes to it.
                Thank you Greatly
                Dave.
                You really should start a new thread for your question. While I suppose converting an independent contractor to employee or vice versa could be legitimate, the circumstances you describe make me think that all is not on the up and up with your company. For one thing, they appear to be trying to dodge the WC bullet.

                You could contact the IRS about your IC status. They have a form you can fill out for them to make a determination.

                You should also contact the WC carrier directly and speak to the claims rep that must be handling your work related injury.

                My last advice is to look for a different employer. The actions of this one just reek.
                Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

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