Results 1 to 11 of 11

Thread: consultant or independent contractor unemployment benefits

  1. #1
    Junior Member
    Join Date
    Dec 2005
    Posts
    4

    Lightbulb consultant or independent contractor unemployment benefits

    My employer pays me as an consultant (independent contractor - 1099 for tax purposes). I'm not sure if my employment status is correct. I work 3 days a week and paid a flat hourly rate, no matter how many hours I work for the week. My title is Administrative and the work I do involves administrative duties that vary from organizing company events to special profects that improve the overall productivity of the company. It appear that I am a part time employee that receives a 1099, and get not company benefits. I'm I considered a part time employee or a consultant?

    They have also cut back my hours making it difficult to meet expenses. I feel that I am being slowly being forced to quit, and if I do, I will not qualify to receive unemployment benefits.

    I need to know what my options are.

    Please help.
    Thanks
    Tate

  2. #2
    Senior Member
    Join Date
    Jul 2005
    Posts
    31,876

    Default

    Off the top of my head, I'd say you were misclassified. Here's the most commonly used criteria. After you check this out, post back and we'll talk about options.
    http://www.irs.gov/businesses/small/...=99921,00.html

  3. #3
    Junior Member
    Join Date
    Dec 2005
    Posts
    4

    Lightbulb

    Thanks for the information Pattymd. It appears that I'm actually an employee.

    All work performed for this company is defined and controlled by them. I punch a clock, get paid for working 9 to 5 + overtime, submit expense reports, and comply with company procedures just as other employees.

    The only aspects that makes me an IC is I recevice a 1099 at the end of the year, and I do not received employees benefits (e.g. paid vacation, holidays, or sick time, or health coverage).

    I work in Pennsylvaina (an at-will state). If I file for unemployment, they will dispute it based on the fact that they consider me and IC.

    My biggest concern is, they have cut back my hours so meeting expenses is deficult. Can they legally continue to cut my hours or should they simply release me? I feel frustrated and that I'm being forced to quit.

    I've begun looking for other employment, but not much is available that pays above minimum wage. What do I do?

    Thanks
    Tate

  4. #4
    Senior Member
    Join Date
    Jul 2005
    Posts
    31,876

    Default

    You can file for unemployment benefits anyway, if your hours are cut substantially (although I'm not sure PA law recognizes this, they may) or if you are laid off. Make sure you tell the agency when you file that you feel you were misclassified as an IC and why. The employer will have to prove that you were not misclassified and it appears that may be difficult to do. Then the employer will have other problems besides just this one, such as with the IRS, state Dept. of Revenue, etc.

    A company cannot treat a worker as an independent contractor just because they want to.

  5. #5
    Junior Member
    Join Date
    Dec 2005
    Posts
    4

    Lightbulb

    Thanks for the info Pattymd,

    My instincts told me I may have been misclassified, but could not be 100% sure. I needed confirmation from someone who is an expert in these matters.

    Well, starting January 2006 I will know if I have job or not, or if they will increase or decrease my hours. I hope to have a new job soon, and can put this problem behind me.

    In either case, I will let you know what the outcome is for the state of PA.

    Thanks
    Tate

  6. #6
    Senior Member
    Join Date
    Sep 2005
    Posts
    916

    Default

    If you have been 1099 for a great length of time, then likely you may not qualify for unemployment because they probably have not payed into your state's unemployment fund. That is, unless you have paid into the fund on behalf of yourself. Contractor means all that they pay is for services rendered, unless you have a bona fide contract stating otherwise.

    If the IRS avenue doesn't work, I would file a claim for unpaid wages with your state DOL or the federal DOL.

    Good luck to you, and let us know what happens.

  7. #7
    Senior Member
    Join Date
    Jul 2005
    Posts
    31,876

    Default

    True, bears00, but if the employee was misclassified and didn't qualify as an independent contractor, that doesn't make any difference. An employer can't get out of reporting and paying taxes for employees just because they choose to call him an IC when he legally should have been classified as an employee.

  8. #8
    Senior Member
    Join Date
    Sep 2005
    Posts
    916

    Default

    That's right, Patty. Yes, taxes SHOULD HAVE been paid on him; however, they weren't.

    Correct me if I'm wrong, but won't our poster have to fight and win the battle of being an employee first? This could either be through the IRS or through the civil court system. I just have a sneaking suspicion that when they go to file for UI, their amount of benefit will either be greatly reduced, or they will be totally ineligible, and the people at the unemployment office or the administrative law judge won't give a rip whether or not this person was correctly or incorrectly classified as an employee or contractor. They are just gonna tell them to get it straightened out for themselves, get the past "employer" to pay into the fund, then they can collect what they should be getting, but not before.

    One thing is for certain, though. This is sure to be a difficult battle for this person, and it's quite unfortunate. Until I started posting on this board, I never knew that there were so many jerks for employers.

  9. #9
    Senior Member
    Join Date
    Jul 2005
    Posts
    31,876

    Default

    I didn't say it was going to be easy or it would happen overnight. But he certainly doesn't have to go to court. Depends on whether this worker wants to get it resolved or not.

  10. #10
    Junior Member
    Join Date
    Dec 2005
    Posts
    4

    Lightbulb

    Pattymd and Bear00,

    I just found out that my last day is December 30. The up side is I don't have to worry that they would cut my hours to 1 day per week (as a tactic to get me to say "I Quit").

    Anyway...

    I found a very interesting article regarding "Independent Contractors vs. Microsoft: Don't Get Cheated Out of Employee Benefits". This article makes reference to a case where an independent contractor sued Microsoft and won (Vizcaino v. Microsoft Corp., 97 F.3d 1187 (9th Cir. 1996)).

    I certainly don't want things to go this far. I just don't want the headache. But if I just sit here and do nothing I could be denying myself unemployment benefits that would help while I’m between jobs.
    What a mess!

    Thanks Guys. Talking it out has helped.
    Tate

  11. #11
    Senior Member
    Join Date
    Jul 2005
    Posts
    31,876

    Default

    Here's a good summary of the case:
    http://www.thelenreid.com/articles/a...art_43_idx.htm

Similar Threads

  1. Kindly help - employer filed a lawsuit.
    By itsmepxa in forum Labor Laws
    Replies: 3
    Last Post: 06-28-2005, 08:39 PM
  2. My previous employer files a lawsuit - help pls
    By itsmepxa in forum Business Law
    Replies: 1
    Last Post: 06-28-2005, 08:21 PM
  3. Replies: 0
    Last Post: 05-23-2005, 11:27 AM
  4. Agency vs. Independent Adoption
    By LilMtnCbn in forum Adoption Law
    Replies: 1
    Last Post: 12-08-2003, 10:37 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •