All I can say is that in your situation, although your company may 'classify' you as an independent contractor, the IRS does not.
Heres a scenario that has happened to many employers in the past;
The company refers to its workers as sub-contractors, and pays them solely by the job.
a disgruntled employee, who at the end of the year, realizes he has to pay taxes on the 1099 that he was given, decides to argue with the IRS.
The IRS then determines that the Company is liable for back SS and some federal taxes because the worker is in fact, an employee.
what happens next, is the reason there are many bankruptcies in this line of work;
once the IRS determines that the worker is an employee, they have the responsibility to look into the state returns for the suspect company. The state then notifies the department of labor, who then investigates the companies records. what happens 100% of the time, is that the DOL finds that the employee is entitled to back pay for overtime and base pay, according to the hours worked vs. pay received.
its like this;
Joe works 60 hours, and makes $ 500.00 that week. Because Joe got paid by the job, he is entitlled to his 40 hrs at the Minimum wage, the overtime on the other 20 hours.
so for 1 week, the company owes Joe roughly $ 367.00.
now heres the kicker. The state then multiplies that by each current employee, PAST Employee and gives the company a bill for that amount, PLUS Taxes.
The State then contacts each past & present employee to let them know they have money owing them.
(by the way, if the state cannot contact all the employees, there is a 3 year statue of limitations, and after that the state re-allocates the funds into thier general fund!!!)
I believe that every employer should be accountable for its employees, but I dont agree with the severe penalties that ensue.
I would suggest talking to your company, letting them know of the potential hazards of working this way, and how to correct it.
Workers Comp generally runs 4-17 % of Payroll, which can be modified. like in the case of using mileage re-imbursement as part of the pay structure.
Hope this helps
Re: Employee Or Independant Sub?
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