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  1. #1
    Join Date
    Jun 2018
    Posts
    3

    Default Steps to Take After Being Missclassified As an Independent Contractor

    My question involves independent contractors in the state of: KY

    I work for a company that does automation of ____________.
    The company consists of four people.
    1. Boss (sales/20% service)
    2 .Secretary
    3. Accountant
    4. Me (100% installs/80% service)

    I have be working for this company for about 13 yrs.When I was first hired on I signed a sub-contractor agreement and only worked on installs for a said price using my truck with his tools and he paid my liability insurance.After about a year he was racking in the money so he bought me a company van with all new tools.He gave me a gas card and change my pay over to $650 salary per week with a $100 commission for each install.At this time we had real sub-contractors that made and welded the ________ we automate.After screwing over about six of these contractors they wouldn't work for him no more.So he said if you learned how to weld he would buy a welder for the van and give me extra $25 for every hour I was welding on a job,so I did.We had another sub-contractor that stitched our cable in the ground for us that he screwed over and quit working for us.So he bought a trencher and made me do it with no extra pay.He said it is part of your job now.When my welding skills started getting better he made me start making said _______ that we automate at the $25 welding rate.

    So for the last 8yrs I completely do 100% of the work the company does with no help and my body is starting to break down.Most installs consists of digging 4'x4'x3' ft deep holes for the install(sometimes two of these holes) and the last 2yrs he has denied me rental of a digging machine so I have to dig them by hand.He says he has to keep cost down to compete with new companies that are popping up in our area.The company hes been going down hill for the last 5yrs.We went from doing 80 installs a year at the peak down to 20 installs last year and this year so far is 8.He hardly works any more he spends most of his time at his 80'x30' personal shop working on his hot rods.It has made it to the point I have no pay check on Friday and will have to wait till a install is completed before I get paid.I am looking for a new job before this company dies off.

    I am in debt now to the IRS and State taxes.I was able to keep taxes a little bit under control when I was making commission on all the gate per year but with the install decline I live pay check to pay check.At $650 a week at my tax rate makes me about $465 a week.Does that sound like good money for the work I do for this company with no benefits?I wire operators,control panels,access control,cameras,electrical panels,weld,fabricate,concrete,dig and do most of the service.I am the only in field worker this company has.

    I drive company van with gas card.
    My first van had company name on it,my newest van he won't put company name on it.
    He pays for my uniforms with no company name.
    All tools and machines are owned by company.
    He bought and pays for my phone.
    I meet every morning at office for work assignment.( I never know what I am doing day to day)
    I work from 8-5 M-F
    I can't work on the side for any other company.
    I have no deduction for taxes.
    I receive a 1099-misc under my name.

    I talked to another company for a job and they told me what my boss is doing is illegal and I should contact the IRS or get a lawyer before I quit.
    What should be my next steps?
    Should I get a lawyer?But what would I sue for?
    How do I prove that I am a employee?

    Thanks for any advice you can give me

  2. #2
    Join Date
    Sep 2010
    Posts
    19,203

    Default Re: Steps to Take on Being Missclassified As a Ic

    Whose name is on the van?

    I agree you're probably misclassified.

    There's nothing to "sue" for. All you're going to get you can get without a lawsuit.
    You can start with www.labor.ky.gov . You can file a complaint there for reclassification and application of certain mandated benefits like UI and workmans comp.
    You can when you submit your taxes this year file an SS-8 asking for a determination as far as the IRS is concerned and a form 8919 so you can avoid paying the part of the SE tax that should have been the employer's share.

  3. #3
    Join Date
    Oct 2016
    Posts
    3,231

    Default Re: Steps to Take on Being Missclassified As a Ic

    Yes you clearly should have been an employee the entire time. There is no reason to wait to leave if you have a job offer. But you can and should report to the IRS, Dept. of Labor (state & federal), your state unemployment and tax withholding agency.

  4. #4
    Join Date
    Jun 2018
    Posts
    3

    Default Re: Steps to Take on Being Missclassified As a Ic

    His company name was on the first van I drove.Two years ago he bought a new van for me to drive but keeps saying we don't have the time to put decals on it.I think he is up to something right back before we got the van he was audited by the IRS and and he kept me away from the office for three days.

    I know he is going to lie about how I work because he lies every day about simple stuff.He lies to customers,he has screwed contractor for $1000s.He even has a felony record for stealing stuff out of a basement when he worked under a company that done the same kind of work.He has been sued in court a couple of times but seem to come out on top somehow.

    I trying to come up with proof on my side before I quit.How can I prove I drove company van and used company tools.I know he will fire me and start driving the van and say he didn't supply me anything.He works out of a expensive sport car so we only have one van.

    All I have so far for proof is phone text records.

    Also if IRS/State determine that I was misclassified will he have to pay his portion of SE of my back taxes I owe?
    And if he fires me will he have to pay my unemployment till I find a job?

  5. #5
    Join Date
    Nov 2013
    Posts
    6,427

    Default Re: Steps to Take on Being Missclassified As a Ic

    I agree with the previous two posts that say you are an employee. But I disagree that you should immediately file with the IRS and the KY labor Cabinet. It's really not that simple. Your best interest would be served by consulting with a labor attorney before you start making waves. .

    You don't have to stress over proving you are an employee. The law favors that you are an employee based on what you have posted. It will be up to a court or commission to make that determination when the time comes.

    Kentucky case law on the subject is pretty much the same as it is in all the other states. The test is the same.

    Going now to guidelines generally used to distinguish "employee" situations from "independent contractor" relationships, we quote further from Larson's Workmen's Compensation Law, page 624:

    "In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered:

    (a) the extent of control which, by the agreement, the master may exercise over the details of the work;

    (b) whether or not the one employed is engaged in a distinct occupation or business;

    (c) The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;

    (d) the skill required in the particular occupation;

    (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;

    (f) the length of time for which the person is employed;

    (g) the method of payment, whether by the time or by the job;

    325*325 (h) whether or not the work is a part of the regular business of the employer; and

    (i) whether or not the parties believe they are creating the relationship of master and servant."
    https://scholar.google.com/scholar_c...en&as_sdt=4,18

  6. #6
    Join Date
    Oct 2006
    Posts
    15,619

    Default Re: Steps to Take on Being Missclassified As a Ic

    Quote Quoting budwad
    View Post
    I agree with the previous two posts that say you are an employee. But I disagree that you should immediately file with the IRS and the KY labor Cabinet. It's really not that simple. Your best interest would be served by consulting with a labor attorney before you start making waves. .

    You don't have to stress over proving you are an employee. The law favors that you are an employee based on what you have posted. It will be up to a court or commission to make that determination when the time comes.

    Kentucky case law on the subject is pretty much the same as it is in all the other states. The test is the same.

    https://scholar.google.com/scholar_c...en&as_sdt=4,18
    I disagree with you Bud. There is no reason not to submit the SS-8 to the IRS asap. They take quite a while to process (about 8 months) and there is no reason to delay that.

  7. #7
    Join Date
    Nov 2013
    Posts
    6,427

    Default Re: Steps to Take on Being Missclassified As a Ic

    Then tell me how that benefits OP who has been working as an IC for 13 years? What exactly will the IRS automatically do for him? Should OP file 13 years worth of 8919s?

    I would want to speak to an attorney before I did anything. But that's me.

  8. #8
    Join Date
    Oct 2006
    Posts
    15,619

    Default Re: Steps to Take on Being Missclassified As a Ic

    Quote Quoting budwad
    View Post
    Then tell me how that benefits OP who has been working as an IC for 13 years? What exactly will the IRS automatically do for him? Should OP file 13 years worth of 8919s?

    I would want to speak to an attorney before I did anything. But that's me.
    Why would you feel that it was necessary to speak to an attorney? The OP hasn't done anything wrong. This is a simple case of asking the powers that be to make a determination as to whether or not someone has been misclassified.

    And...if it only helps him for one or two tax years, that is better than paying the employer's share of taxes for those years.

  9. #9
    Join Date
    Dec 2009
    Location
    Lake Chapala
    Posts
    2,958

    Default Re: Steps to Take on Being Missclassified As a Ic

    The OP has never paid income taxes. That's what he's worried about.

  10. #10
    Join Date
    Oct 2006
    Posts
    15,619

    Default Re: Steps to Take on Being Missclassified As a Ic

    Quote Quoting eerelations
    View Post
    The OP has never paid income taxes. That's what he's worried about.
    He did not say that. He said that he owes taxes not that he never paid any. Believe me, if he had gone 13 years without paying any tax, after receiving 1099's the IRS would be so far into his life that he would be in a world of hurt.

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