#independent contractor

trekwiz:

trekwiz:

Ok, but if you’re an independent contractor in the US and this happens? Find a lawyer, because you might have just gotten a huge payday.

Your position was just referred to as employment. Independent contractors do not have employers; they do not have employment. Congrats, your contact at this company just provided evidence that you were illegally missclassified.

This contact is claiming that you have set hours you’re obligated to fulfill. Unless a work task can only be done at a set time for practical reasons (i.e. you’re an audio freelancer paid to support a live event that occurs at a particular time and requires a certain amount of pre-show setup), a company cannot set an independent contractor’s work hours. This is further evidence that you were missclassified.

The whole exchange establishes that the company is interpreting an employer-employee relationship rather than expecting a service. Discipline and potential for firing (you cannot fire an independent contractor; no longer purchasing their service is not equivalent) establish that this person views themselves as a manager. Independent contractors cannot have managers.

This one text exchange could:

• Get you back pay for the full duration you’ve worked there, to bring you up to the compensation that an employee would have gotten
• Get you back compensation for lost benefits that an employee would have gotten
• Get you back pay for the additional self-employment taxes the company should have covered
• Get the company to pay back taxes to the government
• Get the company to hire everyone who performed a similar role, or face further penalties and fines
• A win would encourage the rest of their missclassified workers to sue for the same, or give them leverage to demand a better deal

If the company is going to screw you over like that, may as well make them pay for it.

Since this is getting a lot of reblogs, here’s a federal source that can help you determine if you’re illegally classified as a contractor:

Misclassification of Employees as Independent Contractors | U.S. Department of Labor

You can also file a form with the IRS to force the company to correct your classification (assuming you meet the criteria), without necessarily having to sue:

Independent Contractor (Self-Employed) or Employee? | Internal Revenue Service

Keep in mind that this is just federal. Most states also prohibit missclassification as an independent contractor; and even if states have more lenient rules, companies still have to comply with this federal law. The rules have largely been bipartisan and existed for decades, so they’re common.

States also have an interest in having regulations about missclassification: it’s a significant loss of tax revenue. Your self employment tax does not fully equal what a company would have paid for you in payroll taxes.

A lawyer can help point you in the right direction if a company is currently missclassifying you.

Common Tax Deductions for Construction Workers

Regardless of your trade in the construction industry, allowable tax deductions can lower your tax liability and possibly lead to getting a tax refund. You can deduct common expenses such as tools and materials, and even certain other items that come in handy in your business or on the job. 

If you’re an employee for a construction company, rather than an independent contractor, and your employer doesn’t reimburse you for expenses on the job, your unreimbursed employee expenses are no longer deductible. Independent contractors generally have no limit on the ability to deduct work related expenses. See the full TurboTax article for details so you can plan ahead.