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Improperly Classified As 1099 Contractor

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  • 03-09-2009, 11:26 AM
    John7
    Improperly Classified As 1099 Contractor
    My question involves unemployment benefits for the state of: California

    I was a salaried employee (regional sales mgr.) for a company for 2 years before business slowed at which time the employer decided to make me 100% commission based (still regional sales mgr.). However, the only aspects of the job that changed were the salary to commission structure and the W2 to 1099 change. The employer continued to provide a desk, telephone and laptop for my use (although I wasn't in the office on a daily basis). They reimbursed travel expenses when I called on clients and paid for expenses to attend trade shows. I attended weekly meetings at the facility and was provided with a company car the last six months of my employment. I was also included on the company health insurance plan but reimbursed them for this. Lastly, I was not permitted to represent any other companies. When I made the attempt, I was fired.

    Does it appear I was treated as an employee or contractor? If it seems I was improperly classified, how do I go about challenging EDD of California that I qualify for unemployment? Does this open up a big can of worms with my former employer? Thanks.
  • 03-09-2009, 02:46 PM
    johnb123
    Re: Improperly Classified As 1099 Contractor
    This should help:

    "Independent Contractor or Employee"

    "California Test for Employment
    Internal Revenue Service Test for Employment
    Statutory Employees and Nonemployees"

    http://www.taxes.ca.gov/iCorE.bus.shtml
  • 03-09-2009, 03:01 PM
    John7
    Re: Improperly Classified As 1099 Contractor
    Thanks johnb123 for your guidance. I've taken a look at this site, however, it seems this is a pretty grey area as some factors apply to my situation and some do not. I am applying for unemployment but know I won't qualify with a 1099. Unfortunately, didn't realize the consequences of becoming a 1099 employee at the time, but also didn't have much choice if I wanted to keep my job. Just don't know where to go from here...
  • 03-09-2009, 03:09 PM
    johnb123
    Re: Improperly Classified As 1099 Contractor
    Did you check the IRS site?

    Independent Contractor (Self-Employed) or Employee?

    http://www.irs.gov/businesses/small/...=99921,00.html

    If you're checked these sites, you'll have to wait for your EDD interview. If you're denied, you can appeal.
  • 03-09-2009, 04:17 PM
    John7
    Re: Improperly Classified As 1099 Contractor
    Yes, I've checked the websites you suggested. It doesn't sound promising since there are no hard and fast rules. At least I may get an interview with EDD to present my case. I thought they would likely see the 1099 and flat out deny me without looking at the details. It's so difficult getting anywhere with the government, especially now. Thanks for the insight.
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