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breach of contract California

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  • breach of contract California

    I work as an independant contractor (W2) for a pharma through a consulting firm who cuts my check.
    The W2 contract I have is between the firm and myself and it requires a 30 days notice for termination.
    The firm has failed to honor their benefits obligations as listed in the contract which made me warn them about breach of contract.
    The pharma heard this week about these problems and decided to end my work assignement effective immediatley.
    Is this a violation of the 30 day notice? and does Labor Code 103 apply, ie my wages have to be paid immediatley?
    thanks

  • #2
    First of all, if you are receiving a W2, you aren't an independent contractor. If you are an independent contractor, then employment law doesn't apply and you are in the contracts law arena. Even if you do have a contract, you will need to take it to a lawyer to review to see if the terms are enforceable. Often what employees assume are contracts are not.
    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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    • #3
      Thank you for your response.
      I was a little bit confused about whether I was an idependant contractor or not, since this is the first time I work on a contract basis.
      So if I receive a W2 at the end of the year, then I am not an idependant contractor??

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      • #4
        I am going to give you a pointer to an article on the subject but basically all workers are either employees (EE) or independant contractors (IC) . The default is employees. The employer must always treat a worker as an EE until and unless the employer is prepared to hard support the IC classification. IRS has one set of classification rules (the 20-factor test), federal DOL has a somewhat different test based loosely on the older Common Law standards, and state DOL do whatever they do. The employer can face fairly serious penalties for getting it wrong. Ignoring the classification rules for the moment, basically:
        - Employees have taxes withheld from their checks and get W2s at year end. They are subject to Labor Law. They are normally eligible for worker's compensation and unemployment insurance.
        - IC (if correctly classified) are vendors. They do not have employers at all, they customers. They are not subject to labor law, but instead are subject to Contract Law. They are not eliglbe for WC or UI. They do not have taxes withheld from their payments and get a 1099 at year end from their customers. Since an IC is supposedly an indpendant business unrelated to their customers, the IC is responsible for a number of reporting and tax obligations that employees are not.
        - There are a small number of statutory exceptions where someone wrote a law saying to ignore the normal classification tests and treat the worker in a certain fashion. An outside board of director for example is functional an IC because the law says so. An inside (existing employee) board of director however remains an employee because the law does not say otherwise.

        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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