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Temp Worker or Independent Contractor California

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  • Temp Worker or Independent Contractor California

    My coworker's and I are Reliability Technicians at an electronics company and are paid hourly. My coworkers and I are employed by company A, but work for company B as independent contractors. The work we do for B is exactly the same as a regular employee of B. Our work is part of Bs regular business. It is performed in Bs buildings, under Bs direction. B supplies all the tools and equipment. The job requires special skills. We go to the same weekly staff meetings and have 1-on-1s with the same manager as B employees. We get paid hourly just like B employees. We don't ask A for raises, we have to ask B. B will then tell A how much to pay us.

    For 1 of us, this has been going on for 5 1/2 years. For 5 of us, it's been 4 to 5 yrs. There were 6 other people in the same situation, but they have been converted after 1-3 yrs.

    Is this legal? If not, what recourse do we have? Can we get back pay?

    Thanks.

  • #2
    I'm sorry, I'm confused. What do you think is potentially illegal? Not having been hired as employees of B? Or something else?
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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    • #3
      If another company is paying you (company A) then you are not an employee of company B. The question is, are you an employee of company A. Here's a link to the IRS on independent contractors: http://www.irs.gov/businesses/small/...=99921,00.html . The situation you describe is often an employee situation, the company you work for outsources you to company B. Since the main purpose of their business is outsourcing, that gives a lot of weight towards you being an employee. If you were a plumber that came in to Company A once a week to roto-rooter, that would be IC. (This is general info, but I have won a case against a company that was improperly classifying you.

      Things to consider: Were you given a company manual? Does it give you a bunch of rules to follow? Do you work full time at company B? Does the company manual forbid you to work for competitors? Here's another link to a document of unknown source, and it refers to the prior IRS scheme for determining whether you are an IC or employee. http://www.webster.edu/about/policy/..._checklist.pdf It is useful if filing an SS-8 Determination of Worker Status. The new scheme for filing addresses 3 areas, but the source above is helpful in filing a complaint and making sure you address the right issues.

      However, what is your goal here? To be classified as an employee? You're still responsible for filing your tax returns and paying the taxes that weren't collected by your employer, the IRS won't go to the employer and try to collect those taxes. You also could have to refile for the years you've worked there, as an employee instead of IC, which could reduce you allowable deductions.

      An unfavorable determination by the IRS can bankrupt a company or at least cost them a ton of money defending it. BTW, California (I can't remember which department)would also be interested, they don't get paid unemployment, SDI, etc. that they are entitled to if you are an employee.


      What is the outcome that you are after? What do you want to happen if you believe you are an employee, and/or file an SS-8 with the IRS? Filing, and winning an SS-8 determination is not necessarily to your benefit, depending on what you want to happen.
      I am not an attorney, and don't play one on TV. Any information given is a description only and should be verified by your attorney.

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      • #4
        There is a short answer and a long answer to your question
        - The short answer is that you are someone's employee. As long as some company is treating you like an employee, the chances the government cares which company is your employer is poor.
        - The long answer is a lot more complicated. Once upon a time, a bunch of programmers where employed by some third party companies whose sole function was to be their employer of record. These third party companies had a single client where these workers spent their entire time doing exactly the same thing as the direct employees of the client. These third party workers wanted the same benefits, especially stock options, so they found some VERY good attornies. Because there was a huge amount of money potentially involved, the very good attornies were fine with working on a contigent basis, and they later ended up winning a huge settlement from the client. Also known as Microsoft. Now this case is basically the Holy Grail among trial attornies. In part because it is one of the very few cases of this type that anyone actually won. Most other similar "cases" never go to court, never get settled and tend to lose when they do go to court.
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

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        • #5
          Thank you all for taking the time to answer my questions. Our payroll taxes are being handled by company A. What we are looking for is can company B keep us temporary indefinitely?

          When we read the guidelines on what determines an IC or employee, http://www.dir.ca.gov/dlse/faq_indep...contractor.htm, we get the impression that we should have been converted by now. Company B knows the work load is there to warrant conversions, that's why they've kept so many of us for so long. We feel we are wrongfully missing out on the benefits regular employees are getting.

          In Silicon Valley there is an unwritten rule that after 1yr, you either let them go or convert them. I have heard that another site of company B has some sort of judgement against them for keeping temporary workers for too long. Whenever a workers 1yr is up, a government agency (not sure which one) monitors company B's conversion/layoff numbers to make sure they are doing it properly. Is there a way I can find out more details about this judgment? It sounds like it would be applicable to us.


          DAW, where can I find more information on the Microsoft settlement?

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          • #6
            You can't force B to hire you. They can not keep you as a temp for the sole purpose of denying you benefits but no law in any state forces a company to hire someone after a year. If you are getting benefits already, you have no claim at all. In any case you wouldn't get back pay as you have already been paid. No court is going to order that you be paid twice.
            I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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            • #7
              Originally posted by RussellL View Post
              DAW, where can I find more information on the Microsoft settlement?
              Google. I tried "microsoft settlement worker" and found that court case and some others on the first screen.
              http://www.google.com/url?sa=t&rct=j...RjpRkuC6pH-nRA
              "Reality is that which, when you stop believing in it, doesn't go away".
              Philip K. **** (1928-1982)

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