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  1. #1

    Default W2 vs 1099 Subcontractor Employment Contract

    My question involves employment and labor law for the state of: NY

    I live in MD and have been interviewing for an IT position with a NY based consulting firm (referenced below as Company A) on a contract located in VA (Company B). (I believe this would fall under NY law). Initially we had discussed a 1099 arrangement, but subsequently I told them I wanted W2. Company A verbally agreed and I requested a written offer letter (not legally binding contract) to clarify the terms of employment offer (including pay rate) and ensure we were aligned. I was sent new employee forms to fill out (background check authorization, direct deposit, w4, etc). I have not yet filled them out, but requested again the written offer and was sent a document entitled "subcontractor agreement". It essentially is an employment contract.

    My question:
    Although it states explicitly that payment will be W2, there are 2 sections (payment for services [invoicing] and taxes, below) that sound like 1099 verbage and I'm trying to understand if I'm right here, and whether it's worth changing. From the contract:

    The Consultant will be paid for services, a sum of $xx per hour (W-*‐2), all inclusive, beginning no later than month xx, 20yy and extending for a period of approximately one year, or until agreed upon by all parties.

    PAYMENT FOR SERVICES. The consultant will send monthly invoices to Company A. Payment will be issued by Company A on a biweekly basis, generally via a third party payroll and payment processing firm.

    5.TAXES. The Consultant shall be responsible for any applicable employment taxes, including all federal, state and local.

    I also am not sure whether NY, VA or MD state taxes would apply?

    Thanks for any insight!

  2. #2
    Join Date
    Sep 2005
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    Default Re: W2 vs 1099 Subcontractor Employment Contract

    It sounds like they modified their independent contractor contract and missed a few details.

    Is Company B your company? How does Company B factor in if you're being hired as an employee of Company A?

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