Can You File Theft of Services Charges for Unpaid Commissions

[I've had it.]

My question involves independent contractors in the state of: Florida

Can I file Theft of Services charges against a former employer? Could I also sue him for Theft of Services? Could several of us get together and class action sue him for Theft of Services?

Here's the situation:

I worked as a 1099 Independent Contractor for an insurance brokerage in Floriduh. Commissions were to be paid each week on Defined Benefits coverage policies sold when intial payment of non-refundable registration fee cleared (and definitely by the time the policy went active!), and commissions for Major Medical policies were to be paid when the brokerage received payment from the Major Medical insurance company. We were told that Major Medical commissions could take up to two months to come through. It's now been more than double that time and I have found out from other employees that no one has ever been paid on any Major Medical coverage that has been written.

I kept and have meticulous records of these policies (and the clients that purchased them) that I sold but, amazingly enough, the pay statements from the brokerage kept showing inaccurate and mysteriously shifting, changing information. I also have maintained all past pay statements for comparison purposes and reconciled them to verify my suspicions.

Multiple policies are completely missing from the pay statements and supposedly the management can't find record of them at all (nearly all of these were Major Medical policies) and multiple Defined Benefits policies are marked as commission still "pending" when the payment cleared and the coverage went active months ago. They also claim charge-backs from non-refundable registration fees, often more than once for the same client, and cancellations from coverage that is active.

Their "record keeping" is very purposefully "disorganized" so that most employees never see more than $300-400 per week, no matter what, and after you're gone somehow nothing more ever "clears through".


Long story somewhat shortened; I've now been gone over two months and still haven't been paid at least $1500 in owed commissions. I did some quick math (after talking to several other employees that were there longer than me and did more business) and figured out that the owner of the company is "disappearing", at the very bare minimum, well over $500,000 (not a typo) a year in employee commissions. He has three offices averaging 15 salespeople per office and the turn-over is very high.

I went to the Department of Labor but they are of no use to independent contractors. I went to the Department of Financial Services (which oversees insurance brokers and companies) and they were also of no assistance.

Can I/we have him arrested and sue him? And I do mean him, personally, since HE has money but paychecks bounced for everyone on a regular basis. One bank refused to continue carrying his business account because of this.

What can I do to get paid and stop this predator from robbing other people trying to find a job?

[KeyWestDan]

Anybody in law enforcement will tell you it is a civil matter.

If you can prove that it rises to the level of criminal fraud, you might be able to sell it to the police, or more likely the State Attorney or DA. The SA/DA have their own investigators and know alot more about fraud issues and other white collar crime than the cops.

[PattyPA]

Didn't you post this question (though abbreviated) on another forum?

[I've had it.]

Yes, because I wanted to learn about both the criminal charges aspect and any other possible remedies that would apply specifically to Independent Contractors, as this is something that occurs pretty regularly (more often than not) here in Florida to people employed in sales of all sorts.

I felt this fell into both categories and was hoping that someone from each area might respond. And also so that others doing searches in different ways, like I did, would be able to more easily find the info, too.

Did you have any information on this that you would share?

[PattyPA]

Only what I already said--based on my understanding of the type of work you do, you almost certainly don't meet the criteria for independent contractor status in the first place. The way it stands right now, you don't have an employer, you have a customer/client.

However, if you don't want to deal with that probability, just sue for breach of contract.

[I've had it.]

Only what I already said

I haven't received any answers from you before this. Perhaps what you wrote didn't post. I looked at the other post I submitted and there wasn't an answer from you there either, although that post is no longer listed in my User CP.

I don't understand why you think I'm somehow not an independent contractor when I was hired as an independent contractor and signed a W-9 for them. The agreement signed with them even says, "Unless 2 weeks' notice is given by contractor when leaving no commissions are payable after termination. All final commisions may be held 30 days and will be paid minus charge backs." I gave 2 weeks' notice and have been gone for 2 months.

How are they a "client/customer"?

[PattyPA]

OK, maybe I confused you with another poster. My apologies.

Because the law is pretty specific about what criteria needs to be met to be an independent contractor, regardless of what the company calls you. Do you meet the majority of this criteria?
http://www.irs.gov/pub/irs-pdf/p1779.pdf

Also,

Employee status under common law. Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed. See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee.

Generally, people in business for themselves are not employees. For example, doctors, lawyers, veterinarians, construction contractors, and others in an independent trade in which they offer their services to the public are usually not employees. However, if the business is incorporated, corporate officers who work in the business are employees.

If an employer-employee relationship exists, it does not matter what it is called. The employee may be called an agent or independent contractor. It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time.

http://www.irs.gov/publications/p15/...link1000202292

If you're an independent contractor, the company you are selling this insurance for is your customer. IC's do not have employers.

[I've had it.]

Okay....I was scheduled from 12-7 M-Th & 12-5:30 Fri. We had to follow all rules and compliance, follow a script and make calls to who we were told when we were told, there was also a dress code.

Pay was commission vs. salary (or a "salary guarantee") whichever is greater. We were paid $300 per week or $50 commission per client signed up who's payment cleared. Meaning if only 2 client payments cleared through that week, you got paid $300. If 8 clients payments cleared through that week (according to their screwy record keeping) then you got paid $400. If 8 client payments cleared through but supposedly 3 more previously paid on clients canceled or "charged back" (on non-refundable enrollment fees!) you would be paid $300 that week and another $50 would be taken out against the next week's pay above $300.

The checks said "Payroll" on them but no taxes or witholding was taken out.

Department of Labor's position was that since $300 per week for a 33.5hr week was more than minimum wage, nothing could be done since their cases revolve around hourly minimum wage violations.

So what the hell do you do with this? What category does this fall under?

Or is it a set-up specifically created so that there are no real remedies that someone without money (or time since I'm now working in a similar situation only with longer hours and on commission only, no "salary guarantee") might pursue? There is an awful lot of this going on these days now that everyone is desperate to find a job...any job, since many of our previous fields have disappeared.

[PattyPA]

Based on what you've said, I see you as an employee. Having said that, it is correct that the federal DOL will only enforce minimum wage for up to 40 hours worked per workweek, although they will also enforce the full overtime pay (don't know whether you work over 40 hours in a week or not).

However, the IRS would care (because the employer is not withholding taxes-nor paying their share of FICA/Medicare required for employees); the Florida Dept. of Workforce would care (because the company is not reporting your wages for unemployment purposes nor paying the corresponding UI taxes--which means you would have an uphill battle should you have to file for unemployment benefits). The Florida Dept. of Financial Services would care because employees need to be covered by Worker's Comp insurance (if an IC is injured on the job, that person has no Work Comp benefits).

See where I'm going here? IMHO, this company is violating a whole LOT of laws. They're either REALLY ignorant, or it's a scam.

Now, as to what to do.

Go to the IRS website and download, complete, and submit form SS-8 to get a determination as to whether you are an employee or not.

In the meantime, even if you ARE misclassified as an IC, since Florida is basically known as a state which has a Dept. of Labor where nobody picks up the mail or the phone, you would have to sue for any amount over minimum wage anyway.

[I've had it.]

"They're either REALLY ignorant, or it's a scam."

IMHO, it's both. As I said, my workweek was 33.5hrs. And yes, I am already aware that the DOL is useless, never answers phones, and sends you in a robo-phone circle, both locally and in Tallahassee; each suggesting you call the number that just referred you to that number in the first place. Although it would be interesting to know if their sub-department of record-keeping violations would somehow apply.

Thank you for your insights and suggestions. They are appreciated.

But back to the original question.

Can I file/press Theft of Services charges against this scumbag and have him arrested? From what I understand, Florida has rather broad definitions of theft of service and as far as I can tell this could fall under that topic since I did an agreed upon financially valuable and specifically valued service and am not being paid for it.

Also, wouldn't I (and possibly others) be suing for the commissions owed, not amounts above minimum wage?