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1099 Misclassification & witholding wages Massachusetts Michigan

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  • 1099 Misclassification & witholding wages Massachusetts Michigan

    State: Michigan

    I have been working through a staffing agency at one of their clients for the last 8 months. I was hiring specifically to work for this particular client (i.e., I had to interview with the client to get hired).

    When the staffing agency made me the offer, they proposed that I come on as a 1099 IC for 90 days, and then they would review my performance and convert me to W2 if all was well. I have this in an email that they sent me. The 90 days came and went.

    I brought this to the staffing agency owner's attention after some time. Mainly because my IC status was keeping me from getting my house refinanced, since the bank considered me to be self employed. The staffing agency owner thanked me for bringing this to his attention and agreed that they needed to get it taken care of. I also have this in an email. Yet again, nothing ever happened.

    Fast forward a few more months...the company that I was placed at started doing massive layoffs and specifically reducing their contractor workforce. So, my position was most likely going to be eliminated, since I had absolutely no work to do (I'm a Recruiter; they were not doing any hiring).

    I knew that as a 1099 IC, I would have to fight to get any unemployment benefits, so I started to look for a job. I found a job. The new job needed someone to start immediately so I was only able to give 2 days notice.

    Now, the staffing agency, has decided not to pay me for the last 4 weeks that I worked.

    I did not ever meet any of the IRS or state of MI rules for a 1099 IC. I have contacted the state of MI, and they agree that I was misclassified. They are going to give me some kind of documentation and also probably audit the staffing agency.

    Now, here are my main questions:

    1) Since they have withheld my pay, will I have to take them to small claims court to get it back, or, once it's determined that I should have been a W2 employee all along, will I just have to file a wage claim with the state?

    2) While I was working at their client, they placed another person in a similar role with the same client in the same department where I worked. This person, like me, began his employment with the staffing agency specifically for this client. For some reason they started him out as a W2 salaried employee with benefits. Is this discrimination of some kind?

    3) While working, I was paid on an hourly basis. I was not ever paid overtime, although I usually worked more than 40 hrs. I was not given benefits that they gave to other employees. Now that they have withheld my pay, and I won't be paid by my new employer for several weeks, I'm going to incure a major financial hardship. Should/can I sue for those wages and damages as well?

    Sorry that was so long! I wanted to make sure I gave all of the background.
    Last edited by Lab187; 11-15-2007, 10:09 AM.

  • #2
    1. File the wage claim. Mention in it that you believe you were misclassified as an IC from XX date to XX date, at which time you became an employee.

    2. Not unless the difference in treatment was due to a protected class, such as age, race, gender, ethnicity, etc. It's very possible the other individual knew that they didn't meet the criteria for IC status, and forced the company's hand.

    3. Unless you met the job duties criteria for Computer Professional AND were paid an hourly rate of at least $27.63 per hour, you were legally entitled to overtime (there are couple other exceptions, but they're likely not applicable). What, in fact, did you do?

    Regarding the fact that, because of your misclassification, you were not offered benefits, I will leave to cbg.
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


    • #3
      What benefits are we talking about?
      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.


      • #4
        I work as a Corporate Recruiter, in a department of other Corporate Recruiters. Half of my team was FTE and the other half were contractors like me (although none on a 1099). I was paid $30/hr.

        Benefits: health benefits, paid time off.


        • #5
          Then I'd file the claim for the overtime. All the DOL can do is say no (and it's unlikely they will, since you were paid on an hourly basis) and you're no worse off for the effort.
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


          • #6
            Regarding the discrimination, I have no way of knowing why they decided to pay the other person as a W2 employee. The only reason that I know he was paid that way is because he asked me a question about the medical benefits and I told him that I had no idea because I was paid on a 1099.

            He was stunned, which makes me think the conversation never even came up with they offered him the job. I honestly don't think they considered bring him on as anything other than a regular employee.

            As a side note, I am in a protected class and the other employee is not. I don't ever pull the "race card", but I honestly can't understand why this company treated me so unfairly.

            As a matter of fact, when I started they had another person placed at this same client in the same department. He had been on this client assignment for over 3 years. He was not paid as a 1099 contractor either.

            Just seems a little strange to me that out of 3 people, who were all Recruiters at the same client doing basically the same job, I'm the only one who didn't get any benefits?


            • #7
              Everyone is in at least three "protected" classes: race, gender, and national origin.
              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


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