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  1. #1

    Default Letter from New Jersey Department of Labor and Workforce Development -Employer Accts

    Hey all

    I’m a self employed photographer living in the state of New Jersey. Recently, I was sent a letter from an auditor at the department of labor and workplace development, which reads:

    “An examination of the books of (company), Inc disclosed payments were made to you for services performed as a subcontractor in years 2017 and 2018. This examination includes making independent contractor/employee determinations under R.S.43:21 - 19(i)(6)(A)(B)(C) of the New Jersey Unemployment Compensation Law.

    Please forward copies of the following for the years indicated above:

    Federal income tax returns - Form 1040 Schedule C Front and Back
    Or
    Form 1065 or Form 1120, 1120S

    In addition, provide copies of the following if applicable:
    Business Cards, Business Invoices, Letterhead
    Telephone book/newspaper/internet advertisement
    Business Insurance

    This information is necessary to correctly determine your relationship with the above named employer. “

    They then go on to send me a questionnaire to return with the requested documents entitled Worker Classification Questionnaire:

    To me, it seems like they’ve audited the company i performed services and are looking for worker misclassification, but my accountant thinks they’re trying to figure out if I have people working for me (which I don’t). Any help on the matter would be appreciated.

  2. #2
    Join Date
    Mar 2013
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    Default Re: Letter from New Jersey Department of Labor and Workforce Development -Employer Ac

    Quote Quoting Thebashartesla
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    To me, it seems like they’ve audited the company i performed services and are looking for worker misclassification, but my accountant thinks they’re trying to figure out if I have people working for me (which I don’t).
    Could be either or both.

    Quote Quoting Thebashartesla
    View Post

    Any help on the matter would be appreciated.
    Comply with the request. There are likely unpleasant consequences if you don't.

    Or, consult an attorney and see if you have the right to remain silent in this type of matter.

  3. #3
    Join Date
    Jan 2011
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    327

    Default Re: Letter from New Jersey Department of Labor and Workforce Development -Employer Ac

    Quote Quoting Thebashartesla
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    To me, it seems like they’ve audited the company i performed services and are looking for worker misclassification, but my accountant thinks they’re trying to figure out if I have people working for me (which I don’t). Any help on the matter would be appreciated.
    I think you have it right. My LLC got a similar letter but from WV not NJ. We just supplied the info requested along with a copy of our invoices to the other company and that was the end of it.

  4. #4
    Join Date
    Nov 2013
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    6,714

    Default Re: Letter from New Jersey Department of Labor and Workforce Development -Employer Ac

    Quote Quoting Thebashartesla
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    To me, it seems like they’ve audited the company i performed services and are looking for worker misclassification, but my accountant thinks they’re trying to figure out if I have people working for me (which I don’t). Any help on the matter would be appreciated.
    If they wanted to know if you had people working for you they would have done an audit on your books and bank account. You are correct to assume that this has to do with misclassification of workers as IC rather than employees.

    You have nothing to worry about in complying with the requests other than perhaps finding yourself not working for company X after the DLWD gets through with their investigation. But the bright side is that if you are misclassified, you would be eligible for unemployment benefits.

    But make no mistake that this is a big deal for your employer should you be misclassified.

    Google and read about the ABC test in NJ about classification.

    The first test is if you do the same work as the employer. For example: if you are a photographer working for a photographer the employer fails the first test. If they tell you where and when to work, they fail. If you use their equipment or do your work in their place of business, they fail. And if you don't have a viable business separate from your work for them, they fail.

  5. #5
    Join Date
    Oct 2006
    Posts
    15,996

    Default Re: Letter from New Jersey Department of Labor and Workforce Development -Employer Ac

    Quote Quoting Thebashartesla
    View Post
    Hey all

    I’m a self employed photographer living in the state of New Jersey. Recently, I was sent a letter from an auditor at the department of labor and workplace development, which reads:

    “An examination of the books of (company), Inc disclosed payments were made to you for services performed as a subcontractor in years 2017 and 2018. This examination includes making independent contractor/employee determinations under R.S.43:21 - 19(i)(6)(A)(B)(C) of the New Jersey Unemployment Compensation Law.

    Please forward copies of the following for the years indicated above:

    Federal income tax returns - Form 1040 Schedule C Front and Back
    Or
    Form 1065 or Form 1120, 1120S

    In addition, provide copies of the following if applicable:
    Business Cards, Business Invoices, Letterhead
    Telephone book/newspaper/internet advertisement
    Business Insurance

    This information is necessary to correctly determine your relationship with the above named employer. “

    They then go on to send me a questionnaire to return with the requested documents entitled Worker Classification Questionnaire:

    To me, it seems like they’ve audited the company i performed services and are looking for worker misclassification, but my accountant thinks they’re trying to figure out if I have people working for me (which I don’t). Any help on the matter would be appreciated.
    I have seen these kinds of letters before, but I have never seen them ask for copies of the subcontractor's tax returns. I find that to be a bit invasive. However, they are only asking for a copy of your Schedule C so that is probably ok. The ones I have seen have only asked that you verify that you paid tax on the income.

    They are definitely auditing the company that paid you, not you at all.

  6. #6
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    Nov 2013
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    Default Re: Letter from New Jersey Department of Labor and Workforce Development -Employer Ac

    Quote Quoting llworking
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    However, they are only asking for a copy of your Schedule C so that is probably ok.
    They do that to match the gross income with what the employer paid. If the gross income is close to what the employer paid, then OP doesn't have a viable independent business.

  7. #7
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    Oct 2006
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    Default Re: Letter from New Jersey Department of Labor and Workforce Development -Employer Ac

    Quote Quoting budwad
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    They do that to match the gross income with what the employer paid. If the gross income is close to what the employer paid, then OP doesn't have a viable independent business.
    I started to respond differently because I originally misread what you wrote. Yes, that is one reason why they might ask for a Schedule C.

  8. #8

    Default Re: Letter from New Jersey Department of Labor and Workforce Development -Employer Ac

    Thanks for the thought out and rational responses everyone; moreover as they mirrored my sentiments. I was curious myself about why they’d require my schedule c, but it makes sense as they’ll want to know what percentage of my income came from this company (it’s actually an exact question on the questionnaire as well), to further determine whether I’m an employee or ic (if I grossed 68k for the year and the company paid me 65 of it, I’d probably be an employee).

    The company I supplied the services for are a multi billion dollar enterprise, and I’m just some shmoe that did headshots for them.

  9. #9
    Join Date
    Feb 2008
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    1,159

    Default Re: Letter from New Jersey Department of Labor and Workforce Development -Employer Ac

    we were just on the company side of this in NC. To our knowledge they didn't ask for documentation directly from the ICs, but it is very likely they could and what they are asking of you is to see whether that employer classified you correctly. If they are the only one you did work for, it might be an issue. If you have no business insurance, it might be an issue. But each situation is detail specific.

    More and more states are getting tougher on ICs.....and I suspect more companies will be seeing more of these audits!

  10. #10
    Join Date
    Oct 2006
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    Default Re: Letter from New Jersey Department of Labor and Workforce Development -Employer Ac

    Quote Quoting hr for me
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    we were just on the company side of this in NC. To our knowledge they didn't ask for documentation directly from the ICs, but it is very likely they could and what they are asking of you is to see whether that employer classified you correctly. If they are the only one you did work for, it might be an issue. If you have no business insurance, it might be an issue. But each situation is detail specific.

    More and more states are getting tougher on ICs.....and I suspect more companies will be seeing more of these audits!
    I think that you mean that more and more states and getting tougher on the companies that treat workers as IC's, not on the IC's themselves.

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