Cracking down on misclassified workers

[quade 3]

This has needed to have been done for years. It's shameful what some companies have been able to get away with.

http://www.nytimes.com/2010/02/18/business/18workers.html

quade -
The World's Most Boring Skydiver

[Rookie120 0]

I have been classified as a contrator before. I think it is more of an issue with smaler companies. Do you know of any large one's like IBM, Chase, Pepsi? Any large company that does this?

If you find yourself in a fair fight, your tactics suck!

[Andy9o8 0]

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I have been classified as a contrator before. I think it is more of an issue with smaler companies. Do you know of any large one's like IBM, Chase, Pepsi? Any large company that does this?

I can't cite any examples off the top of my head, but I think in a tighter economy, the practice has a tendency to "trickle up" into the larger businesses. One real grey area that's ripe for potential abuse is companies' hiring of temporary workers, especially those who work less than full-time (which happens more often in tighter economies). Sometimes they are hired as 1099s, when I'll bet the fed & state taxing authorities would say they ought to be W-2s.

[rushmc 18]

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This has needed to have been done for years. It's shameful what some companies have been able to get away with.

http://www.nytimes.com/2010/02/18/business/18workers.html

The company I work for traines anybody who may hire people, how not to misclassify people. And this generally comes into play when people are hired to do projects that may take a long period of time.

The rules the IRS uses are more simple than one might think but, if a project goes over a projected time frame a company could fall into this un-intentionally. But there are rules others than time too

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[PhreeZone 15]

Interesting to see how this plays out at a DZ near you since the vast majority of DZ workers are independent contractors.

Yesterday is history
And tomorrow is a mystery

Parachutemanuals.com

[Southern_Man 0]

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Interesting to see how this plays out at a DZ near you since the vast majority of DZ workers are independent contractors.

that was my first thought....

"What if there were no hypothetical questions?"

[marks2065 0]

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Interesting to see how this plays out at a DZ near you since the vast majority of DZ workers are independent contractors.

most full time instructors are classified wrong, but I think the DZO's get away with it because they are small companies and under the radar.

[rushmc 18]

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Interesting to see how this plays out at a DZ near you since the vast majority of DZ workers are independent contractors.

This is a good point because one of the most important rules is whether the contractor, or the business, determines when the work is actually done. (work hours and days worked) Contracts between employer and contractor should only specify when the work is to be completed by (generally speaking) If the hours to be worked are laid out by the employer this an indicater that the person working is NOT a contractor

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[livendive 8]

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Interesting to see how this plays out at a DZ near you since the vast majority of DZ workers are independent contractors.

I consider it a huge risk tied to owning a skydiving business. I have an online calendar in which everyone who wants to work signs up for the days they'll be there, so my scheduler knows how much she can book. They tell me when they'll be there, and they have the right to refuse any jump. That's all I can hang my hat on. In the event that I'm proven wrong and the state thinks they are employees, I will instantly be out of business, as unemployment on a seasonal endeavor and worker's comp for professional skydivers would simply cost too much.

The jumpers who take the initiative to form a business of some sort, be it sole proprietorship, LLC, whatever, make me breathe a little easier. Those who can't be bothered leave my ass hanging out in the wind.

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[kelpdiver 2]

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I have been classified as a contrator before. I think it is more of an issue with smaler companies. Do you know of any large one's like IBM, Chase, Pepsi? Any large company that does this?

Since the MS event in the 90s, where the courts reclassified a bunch of contractors, the bigger companies have tended to avoid 1099 hires in preference for those who are W2 employees at a contracting agency, or corp to corp arrangements.

[quade 3]

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I have been classified as a contrator before. I think it is more of an issue with smaler companies. Do you know of any large one's like IBM, Chase, Pepsi? Any large company that does this?

Yes, maybe not directly but I'll give you an example I see all the time.

Large company is trying to reduce its headcount. It contracts out a portion of its work to a smaller company. The smaller company uses misclassified workers.

My largest client is a smaller company that does this. Now, while I really am a freelancer, they have a very large number of people that have been working at the offices of the larger company for years. They occupy the same desks from 9-5 monday through friday. The larger company tells them exactly what work is to be done as if they were regular employees.

It's a scam. Pure and simple.

The larger company is a Fortune 50 company and represents the entertainment industry in the Dow.

That big enough for ya?

quade -
The World's Most Boring Skydiver

[JohnnyD 0]

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The rules the IRS uses are more simple than one might think but, if a project goes over a projected time frame a company could fall into this un-intentionally. But there are rules others than time too

Not true.

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If the hours to be worked are laid out by the employer this an indicater that the person working is NOT a contractor

Also not true.

Read here: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

There is a mountain of case law on this.

[marks2065 0]

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The rules the IRS uses are more simple than one might think but, if a project goes over a projected time frame a company could fall into this un-intentionally. But there are rules others than time too

Not true.

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If the hours to be worked are laid out by the employer this an indicater that the person working is NOT a contractor

Also not true.

Read here: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

There is a mountain of case law on this.

full time instructors that are required to be at the job during certain hours and do not use their own equipment (tandem rigs) are usually considered employees.

[JohnnyD 0]

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full time instructors that are required to be at the job during certain hours and do not use their own equipment (tandem rigs) are usually considered employees.

Skydiving instructors? I don't know of any that get a W-2. I certainly didn't when I was a full timer.

[jdfreefly 1]

Interestingly, this was one of the key points of the dude that flew the plane into the IRS building.

Prior to this move it was quite easy to work as an independent contractor in software engineering and reap pretty impressive income. This move by the IRS made the big contracting firms what they are today. I don't necessarily agree with the mans assertion that they made the engineers slaves to those companies as I've seen plenty with the determination and balls to do it create their own consultancies to be able to continue to act as a contractor...but they've certainly made it very difficult.

Methane Freefly - got stink?

[rushmc 18]

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The rules the IRS uses are more simple than one might think but, if a project goes over a projected time frame a company could fall into this un-intentionally. But there are rules others than time too

Not true.

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If the hours to be worked are laid out by the employer this an indicater that the person working is NOT a contractor

Also not true.

Read here: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

There is a mountain of case law on this.

All I base it on what I have been trained to recognize. I am not saying nor did I say those are the only or final points that are considered. I know it is more complex than that.
And actually, the site you post supports what I said in many ways

From your site

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Behavioral Control


Behavioral control refers to facts that show whether there is a right to direct or control how the worker does the work. A worker is an employee when the business has the right to direct and control the worker. The business does not have to actually direct or control the way the work is done – as long as the employer has the right to direct and control the work.

The behavioral control factors fall into the categories of:

*
Type of instructions given
*
Degree of instruction
*
Evaluation systems
*
Training

Types of Instructions Given

An employee is generally subject to the business’s instructions about when, where, and how to work. All of the following are examples of types of instructions about how to do work.

*
When and where to do the work.
*
What tools or equipment to use.
*
What workers to hire or to assist with the work.
*
Where to purchase supplies and services.
*
What work must be performed by a specified individual.
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What order or sequence to follow when performing the work.

Look. the training was simplified as was my post to show situations that should make you ask the questions. Looks like the training was not too bad huh

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[Rookie120 0]

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That big enough for ya?

I was just wondering if large Corp's do this or is it more of an issue with the smaller firms.

If you find yourself in a fair fight, your tactics suck!

[JohnnyD 0]

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Look. the training was simplified as was my post to show situations that should make you ask the questions. Looks like the training was not too bad huh

Not following you. Not sure what you're trying to say here.

[rushmc 18]

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Look. the training was simplified as was my post to show situations that should make you ask the questions. Looks like the training was not too bad huh

Not following you. Not sure what you're trying to say here.

The training did not go into legal specific and intepitaions. It was set up to help front line managers recognize situations when contractors they may may hire may be considered "employees" by the IRS. As a company you do not want to get into that situation.

So, we were trained to ask/look at the situation and ask questions like, are you (me) setting the hours?" "are you providing the training", "are you telling them how much work must get done today instead of a contract that gives a dead line and agreed to work completed".

Are these proper ways to classify them as contractors or employees? Not directly. But if you answer yes to any of these there is a chance the IRS will consider them employees as opposed to contractors

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[JohnnyD 0]

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Look. the training was simplified as was my post to show situations that should make you ask the questions. Looks like the training was not too bad huh

Not following you. Not sure what you're trying to say here.

The training did not go into legal specific and intepitaions. It was set up to help front line managers recognize situations when contractors they may may hire may be considered "employees" by the IRS. As a company you do not want to get into that situation.

So, we were trained to ask/look at the situation and ask questions like, are you (me) setting the hours?" "are you providing the training", "are you telling them how much work must get done today instead of a contract that gives a dead line and agreed to work completed".

Are these proper ways to classify them as contractors or employees? Not directly. But if you answer yes to any of these there is a chance the IRS will consider them employees as opposed to contractors

Gotcha. Good idea for the company to at least have policies and procedures to prevent such atrocities.

[rushmc 18]

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Look. the training was simplified as was my post to show situations that should make you ask the questions. Looks like the training was not too bad huh

Not following you. Not sure what you're trying to say here.

The training did not go into legal specific and intepitaions. It was set up to help front line managers recognize situations when contractors they may may hire may be considered "employees" by the IRS. As a company you do not want to get into that situation.

So, we were trained to ask/look at the situation and ask questions like, are you (me) setting the hours?" "are you providing the training", "are you telling them how much work must get done today instead of a contract that gives a dead line and agreed to work completed".

Are these proper ways to classify them as contractors or employees? Not directly. But if you answer yes to any of these there is a chance the IRS will consider them employees as opposed to contractors

Gotcha. Good idea for the company to at least have policies and procedures to prevent such atrocities.

Yep

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[marks2065 0]

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full time instructors that are required to be at the job during certain hours and do not use their own equipment (tandem rigs) are usually considered employees.

Skydiving instructors? I don't know of any that get a W-2. I certainly didn't when I was a full timer.

Just because they did not get a w-2 doesn't mean they were not employess. Many should have been employees and got a w-2. This is the area in question and if looked into by the feds many DZO's would be found to not being correct on how they clasified the instructors and would be fined. DZO's 1099 instructors to save on unemployment, work comp and other fees associated with being an employer.

Most full time instructors, since they are payed by the jump, should be considered commisioned employees, and in most cases they need to be paid 1.5 times min wage or x-amount of dollars per jump, wich ever is greater.

[JohnnyD 0]

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full time instructors that are required to be at the job during certain hours and do not use their own equipment (tandem rigs) are usually considered employees.

Skydiving instructors? I don't know of any that get a W-2. I certainly didn't when I was a full timer.

Just because they did not get a w-2 doesn't mean they were not employess. Many should have been employees and got a w-2. This is the area in question and if looked into by the feds many DZO's would be found to not being correct on how they clasified the instructors and would be fined. DZO's 1099 instructors to save on unemployment, work comp and other fees associated with being an employer.

On what grounds would you make the argument that tandem instructors should be W-2 employees instead of independent contractors?

- I'll take the other side.
-- This is hypothetical of course, but I would love it if a dzo or dz manager would get in here with real life experience. All mine is on the receiving end.

[marks2065 0]

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full time instructors that are required to be at the job during certain hours and do not use their own equipment (tandem rigs) are usually considered employees.

Skydiving instructors? I don't know of any that get a W-2. I certainly didn't when I was a full timer.

Just because they did not get a w-2 doesn't mean they were not employess. Many should have been employees and got a w-2. This is the area in question and if looked into by the feds many DZO's would be found to not being correct on how they clasified the instructors and would be fined. DZO's 1099 instructors to save on unemployment, work comp and other fees associated with being an employer.

On what grounds would you make the argument that tandem instructors should be W-2 employees instead of independent contractors?

- I'll take the other side.
-- This is hypothetical of course, but I would love it if a dzo or dz manager would get in here with real life experience. All mine is on the receiving end.

If the DZO requires the hours you work, the employment is full time, and the DZO supplies the equipment, in most cases this would be considered an employee not a subcontractor. I am an employer and need to know these things.

[JohnnyD 0]

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If the DZO requires the hours you work, the employment is full time, and the DZO supplies the equipment, in most cases this would be considered an employee not a subcontractor. I am an employer and need to know these things.

On the other side:

I would argue that the hours are not set. You are limited to daylight hours by USPA, not the dz. You may choose not to take a student for whatever personal reason or possibly that you will not jump if the winds are too high or the temperature is too cold.

The dz may supply tandem rigs, but I would argue that an instructor may or may not be able to use certain equipment based on manufacturer's approval. Also, instructors are free to use their own equipment, manufacturer permitting of course.