CA employee being misclassified as a contractor, what can I do about it?

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I was hired as a graphic designer at a locally owned stationery store in California about a month and a half ago. From the start I knew something was kind of strange, as I was hired for full time but never signed a contract, and all my payments were given to me as untaxed checks.



At first I assumed I was being paid under the table, but when I was asking about taking Christmas off to see my family a comment from my boss raised a red flag: "I hire you as a contractor, so I'm not obligated to give you holiday time off."



I then did some research (and confirmed that my boss does indeed report our incomes), and found out that employers misclassifying employees as contractors is something that is done, often intentionally to avoid offering benefits and paying half of ss/medicare taxes.



I am definitely should be an employee, as:



  1. my boss manages when and where I work,

  2. all of the equipment and supplies I need to work are provided to me in-house, and

  3. I get paid hourly and work 40 hours a week.

This is obviously a bad situation for me, but it's also fraud if my boss is doing it intentionally. Is there anything I can really do about it? Is this a common thing? I'm really unsure how to handle it but I do feel like I'm being taken advantage of.



So far my only game plan is to talk to the store's accountant, as my boss has not been transparent about exactly how my income is reported and what I need to do to prepare my taxes.



TL;DR: I believe I'm being intentionally misclassified as a contractor and I'm unsure of what to do about it. Do I find another job? Do I file an SS-8? I need to know what to do about this.










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  • 19




    You might want to check with an independent accountant (or lawyer) instead of the company one. If your boss is doing this intentionally, the accountant is always certainly in on it.
    – Erik
    15 hours ago






  • 11




    If you haven't signed anything, what is keeping you there? Also you might want to clarify your Goal. Do you want to get a contract and be fully employed, or do you want Christmas of, or do you want to leave?
    – RealCheeseLord
    15 hours ago







  • 14




    If they "hire you as a contractor" they are your client, and it's not up to them when you take your holidays.
    – Sopuli
    10 hours ago






  • 17




    "I hire you as a contractor, so I'm not obligated to give you holiday time off." is so wrong. If you are truly a contractor they cannot dictate your hours. You could contact the state employment commission and the IRS.
    – paparazzo
    9 hours ago






  • 5




    "I hire you as a contractor, so I'm not obligated to give you holiday time off." You hire me as a contractor, so I'm not obligated to work any specific day.
    – UKMonkey
    7 hours ago
















up vote
50
down vote

favorite
5












I was hired as a graphic designer at a locally owned stationery store in California about a month and a half ago. From the start I knew something was kind of strange, as I was hired for full time but never signed a contract, and all my payments were given to me as untaxed checks.



At first I assumed I was being paid under the table, but when I was asking about taking Christmas off to see my family a comment from my boss raised a red flag: "I hire you as a contractor, so I'm not obligated to give you holiday time off."



I then did some research (and confirmed that my boss does indeed report our incomes), and found out that employers misclassifying employees as contractors is something that is done, often intentionally to avoid offering benefits and paying half of ss/medicare taxes.



I am definitely should be an employee, as:



  1. my boss manages when and where I work,

  2. all of the equipment and supplies I need to work are provided to me in-house, and

  3. I get paid hourly and work 40 hours a week.

This is obviously a bad situation for me, but it's also fraud if my boss is doing it intentionally. Is there anything I can really do about it? Is this a common thing? I'm really unsure how to handle it but I do feel like I'm being taken advantage of.



So far my only game plan is to talk to the store's accountant, as my boss has not been transparent about exactly how my income is reported and what I need to do to prepare my taxes.



TL;DR: I believe I'm being intentionally misclassified as a contractor and I'm unsure of what to do about it. Do I find another job? Do I file an SS-8? I need to know what to do about this.










share|improve this question









New contributor




Stephanie Rose is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.















  • 19




    You might want to check with an independent accountant (or lawyer) instead of the company one. If your boss is doing this intentionally, the accountant is always certainly in on it.
    – Erik
    15 hours ago






  • 11




    If you haven't signed anything, what is keeping you there? Also you might want to clarify your Goal. Do you want to get a contract and be fully employed, or do you want Christmas of, or do you want to leave?
    – RealCheeseLord
    15 hours ago







  • 14




    If they "hire you as a contractor" they are your client, and it's not up to them when you take your holidays.
    – Sopuli
    10 hours ago






  • 17




    "I hire you as a contractor, so I'm not obligated to give you holiday time off." is so wrong. If you are truly a contractor they cannot dictate your hours. You could contact the state employment commission and the IRS.
    – paparazzo
    9 hours ago






  • 5




    "I hire you as a contractor, so I'm not obligated to give you holiday time off." You hire me as a contractor, so I'm not obligated to work any specific day.
    – UKMonkey
    7 hours ago












up vote
50
down vote

favorite
5









up vote
50
down vote

favorite
5






5





I was hired as a graphic designer at a locally owned stationery store in California about a month and a half ago. From the start I knew something was kind of strange, as I was hired for full time but never signed a contract, and all my payments were given to me as untaxed checks.



At first I assumed I was being paid under the table, but when I was asking about taking Christmas off to see my family a comment from my boss raised a red flag: "I hire you as a contractor, so I'm not obligated to give you holiday time off."



I then did some research (and confirmed that my boss does indeed report our incomes), and found out that employers misclassifying employees as contractors is something that is done, often intentionally to avoid offering benefits and paying half of ss/medicare taxes.



I am definitely should be an employee, as:



  1. my boss manages when and where I work,

  2. all of the equipment and supplies I need to work are provided to me in-house, and

  3. I get paid hourly and work 40 hours a week.

This is obviously a bad situation for me, but it's also fraud if my boss is doing it intentionally. Is there anything I can really do about it? Is this a common thing? I'm really unsure how to handle it but I do feel like I'm being taken advantage of.



So far my only game plan is to talk to the store's accountant, as my boss has not been transparent about exactly how my income is reported and what I need to do to prepare my taxes.



TL;DR: I believe I'm being intentionally misclassified as a contractor and I'm unsure of what to do about it. Do I find another job? Do I file an SS-8? I need to know what to do about this.










share|improve this question









New contributor




Stephanie Rose is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.











I was hired as a graphic designer at a locally owned stationery store in California about a month and a half ago. From the start I knew something was kind of strange, as I was hired for full time but never signed a contract, and all my payments were given to me as untaxed checks.



At first I assumed I was being paid under the table, but when I was asking about taking Christmas off to see my family a comment from my boss raised a red flag: "I hire you as a contractor, so I'm not obligated to give you holiday time off."



I then did some research (and confirmed that my boss does indeed report our incomes), and found out that employers misclassifying employees as contractors is something that is done, often intentionally to avoid offering benefits and paying half of ss/medicare taxes.



I am definitely should be an employee, as:



  1. my boss manages when and where I work,

  2. all of the equipment and supplies I need to work are provided to me in-house, and

  3. I get paid hourly and work 40 hours a week.

This is obviously a bad situation for me, but it's also fraud if my boss is doing it intentionally. Is there anything I can really do about it? Is this a common thing? I'm really unsure how to handle it but I do feel like I'm being taken advantage of.



So far my only game plan is to talk to the store's accountant, as my boss has not been transparent about exactly how my income is reported and what I need to do to prepare my taxes.



TL;DR: I believe I'm being intentionally misclassified as a contractor and I'm unsure of what to do about it. Do I find another job? Do I file an SS-8? I need to know what to do about this.







contractors benefits fulltime taxes california






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edited 15 mins ago









smci

2,043820




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asked 16 hours ago









Stephanie Rose

20124




20124




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New contributor





Stephanie Rose is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.






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Check out our Code of Conduct.







  • 19




    You might want to check with an independent accountant (or lawyer) instead of the company one. If your boss is doing this intentionally, the accountant is always certainly in on it.
    – Erik
    15 hours ago






  • 11




    If you haven't signed anything, what is keeping you there? Also you might want to clarify your Goal. Do you want to get a contract and be fully employed, or do you want Christmas of, or do you want to leave?
    – RealCheeseLord
    15 hours ago







  • 14




    If they "hire you as a contractor" they are your client, and it's not up to them when you take your holidays.
    – Sopuli
    10 hours ago






  • 17




    "I hire you as a contractor, so I'm not obligated to give you holiday time off." is so wrong. If you are truly a contractor they cannot dictate your hours. You could contact the state employment commission and the IRS.
    – paparazzo
    9 hours ago






  • 5




    "I hire you as a contractor, so I'm not obligated to give you holiday time off." You hire me as a contractor, so I'm not obligated to work any specific day.
    – UKMonkey
    7 hours ago












  • 19




    You might want to check with an independent accountant (or lawyer) instead of the company one. If your boss is doing this intentionally, the accountant is always certainly in on it.
    – Erik
    15 hours ago






  • 11




    If you haven't signed anything, what is keeping you there? Also you might want to clarify your Goal. Do you want to get a contract and be fully employed, or do you want Christmas of, or do you want to leave?
    – RealCheeseLord
    15 hours ago







  • 14




    If they "hire you as a contractor" they are your client, and it's not up to them when you take your holidays.
    – Sopuli
    10 hours ago






  • 17




    "I hire you as a contractor, so I'm not obligated to give you holiday time off." is so wrong. If you are truly a contractor they cannot dictate your hours. You could contact the state employment commission and the IRS.
    – paparazzo
    9 hours ago






  • 5




    "I hire you as a contractor, so I'm not obligated to give you holiday time off." You hire me as a contractor, so I'm not obligated to work any specific day.
    – UKMonkey
    7 hours ago







19




19




You might want to check with an independent accountant (or lawyer) instead of the company one. If your boss is doing this intentionally, the accountant is always certainly in on it.
– Erik
15 hours ago




You might want to check with an independent accountant (or lawyer) instead of the company one. If your boss is doing this intentionally, the accountant is always certainly in on it.
– Erik
15 hours ago




11




11




If you haven't signed anything, what is keeping you there? Also you might want to clarify your Goal. Do you want to get a contract and be fully employed, or do you want Christmas of, or do you want to leave?
– RealCheeseLord
15 hours ago





If you haven't signed anything, what is keeping you there? Also you might want to clarify your Goal. Do you want to get a contract and be fully employed, or do you want Christmas of, or do you want to leave?
– RealCheeseLord
15 hours ago





14




14




If they "hire you as a contractor" they are your client, and it's not up to them when you take your holidays.
– Sopuli
10 hours ago




If they "hire you as a contractor" they are your client, and it's not up to them when you take your holidays.
– Sopuli
10 hours ago




17




17




"I hire you as a contractor, so I'm not obligated to give you holiday time off." is so wrong. If you are truly a contractor they cannot dictate your hours. You could contact the state employment commission and the IRS.
– paparazzo
9 hours ago




"I hire you as a contractor, so I'm not obligated to give you holiday time off." is so wrong. If you are truly a contractor they cannot dictate your hours. You could contact the state employment commission and the IRS.
– paparazzo
9 hours ago




5




5




"I hire you as a contractor, so I'm not obligated to give you holiday time off." You hire me as a contractor, so I'm not obligated to work any specific day.
– UKMonkey
7 hours ago




"I hire you as a contractor, so I'm not obligated to give you holiday time off." You hire me as a contractor, so I'm not obligated to work any specific day.
– UKMonkey
7 hours ago










3 Answers
3






active

oldest

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up vote
82
down vote













It is perfectly fine to be hired as a contractor, provided that (a) you are treated as a contractor, not an employee (basically: nobody can tell you what to do, and you can at any time get a replacement to do your work), and the payment is adjusted (my rule of thumb is that as a contractor, 150 times your daily rate should be about the same as an employee's annual salary before taxes).



What you do: You tell your employer that you are not a contractor. So he should pay your back taxes, make insurance payments as required, and give you your holidays. If he wants you to continue as a contractor, then calculate your daily rate according to my rule of thumb (if you thought your annual salary before taxes should be $60,000, then your daily rate should be $400).



If he says that there is no contract showing you are an employee, then you tell him there is no contract showing you are a contractor, so legally there is an unwritten contract with the most likely usual terms, and that is that you are an employee. You didn't send him a bill, right? They just paid? If you are a contractor, you send a bill and the bill gets paid. They paid you without receiving a bill, therefore you are an employee. You should also have discussed your annual pay. Employees have an annual pay (and get 1/12th every month), contractors have a daily rate. If you never discussed a daily rate, any court will say you are an employee. You might also send a friend in to do your job for a day. As a contractor, you have the right to do that. See what your boss thinks about that.



If you end up financially damaged, you can always take revenge by calling the tax authorities, telling them that you have been employed and you fear that no income taxes have been paid on your behalf. I don't know where you are, but all tax authorities that I know of take this very, very seriously. Because not paying income taxes on your behalf is actually stealing from you.



Obviously you should be looking for a job elsewhere. The company is run by crooks, and you never want to work for a company run by crooks.






share|improve this answer


















  • 17




    Great advice. The only other advice is that you are still responsible for the taxes on the income you have received, so make sure you do damage control.
    – Ramhound
    11 hours ago






  • 7




    "Employees have an annual pay (and get 1/12th every month)..." Not all employees are salaried employees. From the OP's question, the OP is an hourly employee, so that statement wouldn't apply. (The rest largely does.)
    – T.J. Crowder
    7 hours ago






  • 7




    "They paid you without receiving a bill, therefore you are an employee.", I'm not a lawyer but this really sounds like the killer argument. I've never heard of a contractor who doesn't send a bill for the work (before or after completion).
    – pipe
    7 hours ago






  • 5




    I think gov't tax authorities take 'not paying income tax of employees' very seriously because it is stealing from the government rather than from the employee.
    – TylerH
    7 hours ago






  • 4




    @pipe It's also pretty strange to be considered a contractor without a contract. I can't see the company having much success arguing that he was a contractor. If he is, I can't see how they could say "no vacation" without a written agreement.
    – JMac
    6 hours ago

















up vote
25
down vote













Bring this question to a lawyer.



As a community driven answer website, we are inherently unqualified to give you legal advice. If you believe that any laws have been broken, simply quitting could get legally messy since it is unclear what your employement classification is. A labor attorney would do a much better job of explaining what your options are in this situation than we ever could.






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user9313 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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  • 4




    At first glance, this doesn't seem like an answer to the question. But it is. Specific legal advice is off-topic even on law.stackexchange.com, much less here on workplace.stackexchange.com. Even if the person posting an answer were a lawyer, they wouldn't be the OP's lawyer. :-)
    – T.J. Crowder
    7 hours ago







  • 5




    @T.J.Crowder If you believe that a question is off-topic, the procedure is to flag it as such, or vote to close if you have the privilege to do so. An answer saying that something is off-topic is a contradiction.
    – pipe
    7 hours ago










  • @pipe - Quite. It probably should be a comment accompanied by a close vote (for those who are able to VTC).
    – T.J. Crowder
    7 hours ago











  • I do not have privileges to start a close vote on this StackExchange, so I felt the least I could do was to post an answer that highlights the no legal advice rule on SE.
    – user9313
    7 hours ago







  • 1




    @pipe I think there's a difference between a question asking for legal advice (which is off-topic), and a question asking for advice where the answer is to get a lawyer. I think that the situation in the question could possibly not need to involve lawyering up, but it's worth considering that the OP needs to be careful what they do without one.
    – IllusiveBrian
    2 hours ago


















up vote
13
down vote













if they are paying you with a check they aren't paying you under the table. They use a check when they want a paper trail, they use cash when they don't want to a paper trail.



If they were classifying you as a employee they would have had you complete a W-4 (both Federal and the state version). If they are planning on having work as a contractor they should have had you complete a W-9 form, though the W-9 doesn't have to be completed in the first few days of work.



Because your checks are for hours * rate, with no taxes taken out, you know they are paying you as a contractor.



The accountant isn't going to be much help. Depending on their exact role they may be just keeping the books, or they may be providing advice.



Looking through the state of California website it also appears that California requires contractors to file paperwork to register with the state. That may be your next steps. You don't want to be a contractor, but the state requires you to complete the paperwork. There may be an opportunity there to get your classification corrected.



Regarding employee or contractor:




Q. What can I do if I believe my employer has misclassified me as an
independent contractor and as a result am not being paid any overtime?



A. You can either file a wage claim with the Division of Labor
Standards Enforcement (the Labor Commissioner's Office), or you can
file an action in court to recover the lost overtime premiums. In both
situations, it will first be necessary to determine your employment
status, that is, employee or independent contractor, before the issue
of overtime can be addressed and decided. Additionally, if it is
determined that you are an employee and you no longer work for this
employer, you can make a claim for the waiting time penalty pursuant
to Labor Code Section 203. Eligibility for this penalty is dependent
upon your employment status, as independent contractors are ineligible
for the waiting time penalty.




Yes this FAQ item mentions overtime, but the rest of the FAQ makes it clear that overtime is just one reason employers want to call an employee a contractor.



Unless this is a brand new company, and your boss has no clue about labor laws and taxes, your long term prospects with this company are limited. You have no idea where else they are cutting corners. I would start looking for another job.






share|improve this answer
















  • 2




    I think "if he treats you like a contractor, then fill out state paperwork to be a contractor" is bad advice. The employer is treating OP like an independent contractor in all the ways that benefit them (not withholding taxes, not paying benefits, not offering paid vacation), while at the same time treating OP like an employee in all the ways that benefits them (requiring specific hours, etc.). I doubt "I'll stop showing up for my scheduled shifts because I'm an independent contractor" will fly here. I do agree with your final line, *start looking for another job".
    – BradC
    4 hours ago











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3 Answers
3






active

oldest

votes








3 Answers
3






active

oldest

votes









active

oldest

votes






active

oldest

votes








up vote
82
down vote













It is perfectly fine to be hired as a contractor, provided that (a) you are treated as a contractor, not an employee (basically: nobody can tell you what to do, and you can at any time get a replacement to do your work), and the payment is adjusted (my rule of thumb is that as a contractor, 150 times your daily rate should be about the same as an employee's annual salary before taxes).



What you do: You tell your employer that you are not a contractor. So he should pay your back taxes, make insurance payments as required, and give you your holidays. If he wants you to continue as a contractor, then calculate your daily rate according to my rule of thumb (if you thought your annual salary before taxes should be $60,000, then your daily rate should be $400).



If he says that there is no contract showing you are an employee, then you tell him there is no contract showing you are a contractor, so legally there is an unwritten contract with the most likely usual terms, and that is that you are an employee. You didn't send him a bill, right? They just paid? If you are a contractor, you send a bill and the bill gets paid. They paid you without receiving a bill, therefore you are an employee. You should also have discussed your annual pay. Employees have an annual pay (and get 1/12th every month), contractors have a daily rate. If you never discussed a daily rate, any court will say you are an employee. You might also send a friend in to do your job for a day. As a contractor, you have the right to do that. See what your boss thinks about that.



If you end up financially damaged, you can always take revenge by calling the tax authorities, telling them that you have been employed and you fear that no income taxes have been paid on your behalf. I don't know where you are, but all tax authorities that I know of take this very, very seriously. Because not paying income taxes on your behalf is actually stealing from you.



Obviously you should be looking for a job elsewhere. The company is run by crooks, and you never want to work for a company run by crooks.






share|improve this answer


















  • 17




    Great advice. The only other advice is that you are still responsible for the taxes on the income you have received, so make sure you do damage control.
    – Ramhound
    11 hours ago






  • 7




    "Employees have an annual pay (and get 1/12th every month)..." Not all employees are salaried employees. From the OP's question, the OP is an hourly employee, so that statement wouldn't apply. (The rest largely does.)
    – T.J. Crowder
    7 hours ago






  • 7




    "They paid you without receiving a bill, therefore you are an employee.", I'm not a lawyer but this really sounds like the killer argument. I've never heard of a contractor who doesn't send a bill for the work (before or after completion).
    – pipe
    7 hours ago






  • 5




    I think gov't tax authorities take 'not paying income tax of employees' very seriously because it is stealing from the government rather than from the employee.
    – TylerH
    7 hours ago






  • 4




    @pipe It's also pretty strange to be considered a contractor without a contract. I can't see the company having much success arguing that he was a contractor. If he is, I can't see how they could say "no vacation" without a written agreement.
    – JMac
    6 hours ago














up vote
82
down vote













It is perfectly fine to be hired as a contractor, provided that (a) you are treated as a contractor, not an employee (basically: nobody can tell you what to do, and you can at any time get a replacement to do your work), and the payment is adjusted (my rule of thumb is that as a contractor, 150 times your daily rate should be about the same as an employee's annual salary before taxes).



What you do: You tell your employer that you are not a contractor. So he should pay your back taxes, make insurance payments as required, and give you your holidays. If he wants you to continue as a contractor, then calculate your daily rate according to my rule of thumb (if you thought your annual salary before taxes should be $60,000, then your daily rate should be $400).



If he says that there is no contract showing you are an employee, then you tell him there is no contract showing you are a contractor, so legally there is an unwritten contract with the most likely usual terms, and that is that you are an employee. You didn't send him a bill, right? They just paid? If you are a contractor, you send a bill and the bill gets paid. They paid you without receiving a bill, therefore you are an employee. You should also have discussed your annual pay. Employees have an annual pay (and get 1/12th every month), contractors have a daily rate. If you never discussed a daily rate, any court will say you are an employee. You might also send a friend in to do your job for a day. As a contractor, you have the right to do that. See what your boss thinks about that.



If you end up financially damaged, you can always take revenge by calling the tax authorities, telling them that you have been employed and you fear that no income taxes have been paid on your behalf. I don't know where you are, but all tax authorities that I know of take this very, very seriously. Because not paying income taxes on your behalf is actually stealing from you.



Obviously you should be looking for a job elsewhere. The company is run by crooks, and you never want to work for a company run by crooks.






share|improve this answer


















  • 17




    Great advice. The only other advice is that you are still responsible for the taxes on the income you have received, so make sure you do damage control.
    – Ramhound
    11 hours ago






  • 7




    "Employees have an annual pay (and get 1/12th every month)..." Not all employees are salaried employees. From the OP's question, the OP is an hourly employee, so that statement wouldn't apply. (The rest largely does.)
    – T.J. Crowder
    7 hours ago






  • 7




    "They paid you without receiving a bill, therefore you are an employee.", I'm not a lawyer but this really sounds like the killer argument. I've never heard of a contractor who doesn't send a bill for the work (before or after completion).
    – pipe
    7 hours ago






  • 5




    I think gov't tax authorities take 'not paying income tax of employees' very seriously because it is stealing from the government rather than from the employee.
    – TylerH
    7 hours ago






  • 4




    @pipe It's also pretty strange to be considered a contractor without a contract. I can't see the company having much success arguing that he was a contractor. If he is, I can't see how they could say "no vacation" without a written agreement.
    – JMac
    6 hours ago












up vote
82
down vote










up vote
82
down vote









It is perfectly fine to be hired as a contractor, provided that (a) you are treated as a contractor, not an employee (basically: nobody can tell you what to do, and you can at any time get a replacement to do your work), and the payment is adjusted (my rule of thumb is that as a contractor, 150 times your daily rate should be about the same as an employee's annual salary before taxes).



What you do: You tell your employer that you are not a contractor. So he should pay your back taxes, make insurance payments as required, and give you your holidays. If he wants you to continue as a contractor, then calculate your daily rate according to my rule of thumb (if you thought your annual salary before taxes should be $60,000, then your daily rate should be $400).



If he says that there is no contract showing you are an employee, then you tell him there is no contract showing you are a contractor, so legally there is an unwritten contract with the most likely usual terms, and that is that you are an employee. You didn't send him a bill, right? They just paid? If you are a contractor, you send a bill and the bill gets paid. They paid you without receiving a bill, therefore you are an employee. You should also have discussed your annual pay. Employees have an annual pay (and get 1/12th every month), contractors have a daily rate. If you never discussed a daily rate, any court will say you are an employee. You might also send a friend in to do your job for a day. As a contractor, you have the right to do that. See what your boss thinks about that.



If you end up financially damaged, you can always take revenge by calling the tax authorities, telling them that you have been employed and you fear that no income taxes have been paid on your behalf. I don't know where you are, but all tax authorities that I know of take this very, very seriously. Because not paying income taxes on your behalf is actually stealing from you.



Obviously you should be looking for a job elsewhere. The company is run by crooks, and you never want to work for a company run by crooks.






share|improve this answer














It is perfectly fine to be hired as a contractor, provided that (a) you are treated as a contractor, not an employee (basically: nobody can tell you what to do, and you can at any time get a replacement to do your work), and the payment is adjusted (my rule of thumb is that as a contractor, 150 times your daily rate should be about the same as an employee's annual salary before taxes).



What you do: You tell your employer that you are not a contractor. So he should pay your back taxes, make insurance payments as required, and give you your holidays. If he wants you to continue as a contractor, then calculate your daily rate according to my rule of thumb (if you thought your annual salary before taxes should be $60,000, then your daily rate should be $400).



If he says that there is no contract showing you are an employee, then you tell him there is no contract showing you are a contractor, so legally there is an unwritten contract with the most likely usual terms, and that is that you are an employee. You didn't send him a bill, right? They just paid? If you are a contractor, you send a bill and the bill gets paid. They paid you without receiving a bill, therefore you are an employee. You should also have discussed your annual pay. Employees have an annual pay (and get 1/12th every month), contractors have a daily rate. If you never discussed a daily rate, any court will say you are an employee. You might also send a friend in to do your job for a day. As a contractor, you have the right to do that. See what your boss thinks about that.



If you end up financially damaged, you can always take revenge by calling the tax authorities, telling them that you have been employed and you fear that no income taxes have been paid on your behalf. I don't know where you are, but all tax authorities that I know of take this very, very seriously. Because not paying income taxes on your behalf is actually stealing from you.



Obviously you should be looking for a job elsewhere. The company is run by crooks, and you never want to work for a company run by crooks.







share|improve this answer














share|improve this answer



share|improve this answer








edited 10 hours ago

























answered 13 hours ago









gnasher729

75k31137240




75k31137240







  • 17




    Great advice. The only other advice is that you are still responsible for the taxes on the income you have received, so make sure you do damage control.
    – Ramhound
    11 hours ago






  • 7




    "Employees have an annual pay (and get 1/12th every month)..." Not all employees are salaried employees. From the OP's question, the OP is an hourly employee, so that statement wouldn't apply. (The rest largely does.)
    – T.J. Crowder
    7 hours ago






  • 7




    "They paid you without receiving a bill, therefore you are an employee.", I'm not a lawyer but this really sounds like the killer argument. I've never heard of a contractor who doesn't send a bill for the work (before or after completion).
    – pipe
    7 hours ago






  • 5




    I think gov't tax authorities take 'not paying income tax of employees' very seriously because it is stealing from the government rather than from the employee.
    – TylerH
    7 hours ago






  • 4




    @pipe It's also pretty strange to be considered a contractor without a contract. I can't see the company having much success arguing that he was a contractor. If he is, I can't see how they could say "no vacation" without a written agreement.
    – JMac
    6 hours ago












  • 17




    Great advice. The only other advice is that you are still responsible for the taxes on the income you have received, so make sure you do damage control.
    – Ramhound
    11 hours ago






  • 7




    "Employees have an annual pay (and get 1/12th every month)..." Not all employees are salaried employees. From the OP's question, the OP is an hourly employee, so that statement wouldn't apply. (The rest largely does.)
    – T.J. Crowder
    7 hours ago






  • 7




    "They paid you without receiving a bill, therefore you are an employee.", I'm not a lawyer but this really sounds like the killer argument. I've never heard of a contractor who doesn't send a bill for the work (before or after completion).
    – pipe
    7 hours ago






  • 5




    I think gov't tax authorities take 'not paying income tax of employees' very seriously because it is stealing from the government rather than from the employee.
    – TylerH
    7 hours ago






  • 4




    @pipe It's also pretty strange to be considered a contractor without a contract. I can't see the company having much success arguing that he was a contractor. If he is, I can't see how they could say "no vacation" without a written agreement.
    – JMac
    6 hours ago







17




17




Great advice. The only other advice is that you are still responsible for the taxes on the income you have received, so make sure you do damage control.
– Ramhound
11 hours ago




Great advice. The only other advice is that you are still responsible for the taxes on the income you have received, so make sure you do damage control.
– Ramhound
11 hours ago




7




7




"Employees have an annual pay (and get 1/12th every month)..." Not all employees are salaried employees. From the OP's question, the OP is an hourly employee, so that statement wouldn't apply. (The rest largely does.)
– T.J. Crowder
7 hours ago




"Employees have an annual pay (and get 1/12th every month)..." Not all employees are salaried employees. From the OP's question, the OP is an hourly employee, so that statement wouldn't apply. (The rest largely does.)
– T.J. Crowder
7 hours ago




7




7




"They paid you without receiving a bill, therefore you are an employee.", I'm not a lawyer but this really sounds like the killer argument. I've never heard of a contractor who doesn't send a bill for the work (before or after completion).
– pipe
7 hours ago




"They paid you without receiving a bill, therefore you are an employee.", I'm not a lawyer but this really sounds like the killer argument. I've never heard of a contractor who doesn't send a bill for the work (before or after completion).
– pipe
7 hours ago




5




5




I think gov't tax authorities take 'not paying income tax of employees' very seriously because it is stealing from the government rather than from the employee.
– TylerH
7 hours ago




I think gov't tax authorities take 'not paying income tax of employees' very seriously because it is stealing from the government rather than from the employee.
– TylerH
7 hours ago




4




4




@pipe It's also pretty strange to be considered a contractor without a contract. I can't see the company having much success arguing that he was a contractor. If he is, I can't see how they could say "no vacation" without a written agreement.
– JMac
6 hours ago




@pipe It's also pretty strange to be considered a contractor without a contract. I can't see the company having much success arguing that he was a contractor. If he is, I can't see how they could say "no vacation" without a written agreement.
– JMac
6 hours ago












up vote
25
down vote













Bring this question to a lawyer.



As a community driven answer website, we are inherently unqualified to give you legal advice. If you believe that any laws have been broken, simply quitting could get legally messy since it is unclear what your employement classification is. A labor attorney would do a much better job of explaining what your options are in this situation than we ever could.






share|improve this answer








New contributor




user9313 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.













  • 4




    At first glance, this doesn't seem like an answer to the question. But it is. Specific legal advice is off-topic even on law.stackexchange.com, much less here on workplace.stackexchange.com. Even if the person posting an answer were a lawyer, they wouldn't be the OP's lawyer. :-)
    – T.J. Crowder
    7 hours ago







  • 5




    @T.J.Crowder If you believe that a question is off-topic, the procedure is to flag it as such, or vote to close if you have the privilege to do so. An answer saying that something is off-topic is a contradiction.
    – pipe
    7 hours ago










  • @pipe - Quite. It probably should be a comment accompanied by a close vote (for those who are able to VTC).
    – T.J. Crowder
    7 hours ago











  • I do not have privileges to start a close vote on this StackExchange, so I felt the least I could do was to post an answer that highlights the no legal advice rule on SE.
    – user9313
    7 hours ago







  • 1




    @pipe I think there's a difference between a question asking for legal advice (which is off-topic), and a question asking for advice where the answer is to get a lawyer. I think that the situation in the question could possibly not need to involve lawyering up, but it's worth considering that the OP needs to be careful what they do without one.
    – IllusiveBrian
    2 hours ago















up vote
25
down vote













Bring this question to a lawyer.



As a community driven answer website, we are inherently unqualified to give you legal advice. If you believe that any laws have been broken, simply quitting could get legally messy since it is unclear what your employement classification is. A labor attorney would do a much better job of explaining what your options are in this situation than we ever could.






share|improve this answer








New contributor




user9313 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.













  • 4




    At first glance, this doesn't seem like an answer to the question. But it is. Specific legal advice is off-topic even on law.stackexchange.com, much less here on workplace.stackexchange.com. Even if the person posting an answer were a lawyer, they wouldn't be the OP's lawyer. :-)
    – T.J. Crowder
    7 hours ago







  • 5




    @T.J.Crowder If you believe that a question is off-topic, the procedure is to flag it as such, or vote to close if you have the privilege to do so. An answer saying that something is off-topic is a contradiction.
    – pipe
    7 hours ago










  • @pipe - Quite. It probably should be a comment accompanied by a close vote (for those who are able to VTC).
    – T.J. Crowder
    7 hours ago











  • I do not have privileges to start a close vote on this StackExchange, so I felt the least I could do was to post an answer that highlights the no legal advice rule on SE.
    – user9313
    7 hours ago







  • 1




    @pipe I think there's a difference between a question asking for legal advice (which is off-topic), and a question asking for advice where the answer is to get a lawyer. I think that the situation in the question could possibly not need to involve lawyering up, but it's worth considering that the OP needs to be careful what they do without one.
    – IllusiveBrian
    2 hours ago













up vote
25
down vote










up vote
25
down vote









Bring this question to a lawyer.



As a community driven answer website, we are inherently unqualified to give you legal advice. If you believe that any laws have been broken, simply quitting could get legally messy since it is unclear what your employement classification is. A labor attorney would do a much better job of explaining what your options are in this situation than we ever could.






share|improve this answer








New contributor




user9313 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.









Bring this question to a lawyer.



As a community driven answer website, we are inherently unqualified to give you legal advice. If you believe that any laws have been broken, simply quitting could get legally messy since it is unclear what your employement classification is. A labor attorney would do a much better job of explaining what your options are in this situation than we ever could.







share|improve this answer








New contributor




user9313 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.









share|improve this answer



share|improve this answer






New contributor




user9313 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.









answered 7 hours ago









user9313

30113




30113




New contributor




user9313 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.





New contributor





user9313 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.






user9313 is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.







  • 4




    At first glance, this doesn't seem like an answer to the question. But it is. Specific legal advice is off-topic even on law.stackexchange.com, much less here on workplace.stackexchange.com. Even if the person posting an answer were a lawyer, they wouldn't be the OP's lawyer. :-)
    – T.J. Crowder
    7 hours ago







  • 5




    @T.J.Crowder If you believe that a question is off-topic, the procedure is to flag it as such, or vote to close if you have the privilege to do so. An answer saying that something is off-topic is a contradiction.
    – pipe
    7 hours ago










  • @pipe - Quite. It probably should be a comment accompanied by a close vote (for those who are able to VTC).
    – T.J. Crowder
    7 hours ago











  • I do not have privileges to start a close vote on this StackExchange, so I felt the least I could do was to post an answer that highlights the no legal advice rule on SE.
    – user9313
    7 hours ago







  • 1




    @pipe I think there's a difference between a question asking for legal advice (which is off-topic), and a question asking for advice where the answer is to get a lawyer. I think that the situation in the question could possibly not need to involve lawyering up, but it's worth considering that the OP needs to be careful what they do without one.
    – IllusiveBrian
    2 hours ago













  • 4




    At first glance, this doesn't seem like an answer to the question. But it is. Specific legal advice is off-topic even on law.stackexchange.com, much less here on workplace.stackexchange.com. Even if the person posting an answer were a lawyer, they wouldn't be the OP's lawyer. :-)
    – T.J. Crowder
    7 hours ago







  • 5




    @T.J.Crowder If you believe that a question is off-topic, the procedure is to flag it as such, or vote to close if you have the privilege to do so. An answer saying that something is off-topic is a contradiction.
    – pipe
    7 hours ago










  • @pipe - Quite. It probably should be a comment accompanied by a close vote (for those who are able to VTC).
    – T.J. Crowder
    7 hours ago











  • I do not have privileges to start a close vote on this StackExchange, so I felt the least I could do was to post an answer that highlights the no legal advice rule on SE.
    – user9313
    7 hours ago







  • 1




    @pipe I think there's a difference between a question asking for legal advice (which is off-topic), and a question asking for advice where the answer is to get a lawyer. I think that the situation in the question could possibly not need to involve lawyering up, but it's worth considering that the OP needs to be careful what they do without one.
    – IllusiveBrian
    2 hours ago








4




4




At first glance, this doesn't seem like an answer to the question. But it is. Specific legal advice is off-topic even on law.stackexchange.com, much less here on workplace.stackexchange.com. Even if the person posting an answer were a lawyer, they wouldn't be the OP's lawyer. :-)
– T.J. Crowder
7 hours ago





At first glance, this doesn't seem like an answer to the question. But it is. Specific legal advice is off-topic even on law.stackexchange.com, much less here on workplace.stackexchange.com. Even if the person posting an answer were a lawyer, they wouldn't be the OP's lawyer. :-)
– T.J. Crowder
7 hours ago





5




5




@T.J.Crowder If you believe that a question is off-topic, the procedure is to flag it as such, or vote to close if you have the privilege to do so. An answer saying that something is off-topic is a contradiction.
– pipe
7 hours ago




@T.J.Crowder If you believe that a question is off-topic, the procedure is to flag it as such, or vote to close if you have the privilege to do so. An answer saying that something is off-topic is a contradiction.
– pipe
7 hours ago












@pipe - Quite. It probably should be a comment accompanied by a close vote (for those who are able to VTC).
– T.J. Crowder
7 hours ago





@pipe - Quite. It probably should be a comment accompanied by a close vote (for those who are able to VTC).
– T.J. Crowder
7 hours ago













I do not have privileges to start a close vote on this StackExchange, so I felt the least I could do was to post an answer that highlights the no legal advice rule on SE.
– user9313
7 hours ago





I do not have privileges to start a close vote on this StackExchange, so I felt the least I could do was to post an answer that highlights the no legal advice rule on SE.
– user9313
7 hours ago





1




1




@pipe I think there's a difference between a question asking for legal advice (which is off-topic), and a question asking for advice where the answer is to get a lawyer. I think that the situation in the question could possibly not need to involve lawyering up, but it's worth considering that the OP needs to be careful what they do without one.
– IllusiveBrian
2 hours ago





@pipe I think there's a difference between a question asking for legal advice (which is off-topic), and a question asking for advice where the answer is to get a lawyer. I think that the situation in the question could possibly not need to involve lawyering up, but it's worth considering that the OP needs to be careful what they do without one.
– IllusiveBrian
2 hours ago











up vote
13
down vote













if they are paying you with a check they aren't paying you under the table. They use a check when they want a paper trail, they use cash when they don't want to a paper trail.



If they were classifying you as a employee they would have had you complete a W-4 (both Federal and the state version). If they are planning on having work as a contractor they should have had you complete a W-9 form, though the W-9 doesn't have to be completed in the first few days of work.



Because your checks are for hours * rate, with no taxes taken out, you know they are paying you as a contractor.



The accountant isn't going to be much help. Depending on their exact role they may be just keeping the books, or they may be providing advice.



Looking through the state of California website it also appears that California requires contractors to file paperwork to register with the state. That may be your next steps. You don't want to be a contractor, but the state requires you to complete the paperwork. There may be an opportunity there to get your classification corrected.



Regarding employee or contractor:




Q. What can I do if I believe my employer has misclassified me as an
independent contractor and as a result am not being paid any overtime?



A. You can either file a wage claim with the Division of Labor
Standards Enforcement (the Labor Commissioner's Office), or you can
file an action in court to recover the lost overtime premiums. In both
situations, it will first be necessary to determine your employment
status, that is, employee or independent contractor, before the issue
of overtime can be addressed and decided. Additionally, if it is
determined that you are an employee and you no longer work for this
employer, you can make a claim for the waiting time penalty pursuant
to Labor Code Section 203. Eligibility for this penalty is dependent
upon your employment status, as independent contractors are ineligible
for the waiting time penalty.




Yes this FAQ item mentions overtime, but the rest of the FAQ makes it clear that overtime is just one reason employers want to call an employee a contractor.



Unless this is a brand new company, and your boss has no clue about labor laws and taxes, your long term prospects with this company are limited. You have no idea where else they are cutting corners. I would start looking for another job.






share|improve this answer
















  • 2




    I think "if he treats you like a contractor, then fill out state paperwork to be a contractor" is bad advice. The employer is treating OP like an independent contractor in all the ways that benefit them (not withholding taxes, not paying benefits, not offering paid vacation), while at the same time treating OP like an employee in all the ways that benefits them (requiring specific hours, etc.). I doubt "I'll stop showing up for my scheduled shifts because I'm an independent contractor" will fly here. I do agree with your final line, *start looking for another job".
    – BradC
    4 hours ago















up vote
13
down vote













if they are paying you with a check they aren't paying you under the table. They use a check when they want a paper trail, they use cash when they don't want to a paper trail.



If they were classifying you as a employee they would have had you complete a W-4 (both Federal and the state version). If they are planning on having work as a contractor they should have had you complete a W-9 form, though the W-9 doesn't have to be completed in the first few days of work.



Because your checks are for hours * rate, with no taxes taken out, you know they are paying you as a contractor.



The accountant isn't going to be much help. Depending on their exact role they may be just keeping the books, or they may be providing advice.



Looking through the state of California website it also appears that California requires contractors to file paperwork to register with the state. That may be your next steps. You don't want to be a contractor, but the state requires you to complete the paperwork. There may be an opportunity there to get your classification corrected.



Regarding employee or contractor:




Q. What can I do if I believe my employer has misclassified me as an
independent contractor and as a result am not being paid any overtime?



A. You can either file a wage claim with the Division of Labor
Standards Enforcement (the Labor Commissioner's Office), or you can
file an action in court to recover the lost overtime premiums. In both
situations, it will first be necessary to determine your employment
status, that is, employee or independent contractor, before the issue
of overtime can be addressed and decided. Additionally, if it is
determined that you are an employee and you no longer work for this
employer, you can make a claim for the waiting time penalty pursuant
to Labor Code Section 203. Eligibility for this penalty is dependent
upon your employment status, as independent contractors are ineligible
for the waiting time penalty.




Yes this FAQ item mentions overtime, but the rest of the FAQ makes it clear that overtime is just one reason employers want to call an employee a contractor.



Unless this is a brand new company, and your boss has no clue about labor laws and taxes, your long term prospects with this company are limited. You have no idea where else they are cutting corners. I would start looking for another job.






share|improve this answer
















  • 2




    I think "if he treats you like a contractor, then fill out state paperwork to be a contractor" is bad advice. The employer is treating OP like an independent contractor in all the ways that benefit them (not withholding taxes, not paying benefits, not offering paid vacation), while at the same time treating OP like an employee in all the ways that benefits them (requiring specific hours, etc.). I doubt "I'll stop showing up for my scheduled shifts because I'm an independent contractor" will fly here. I do agree with your final line, *start looking for another job".
    – BradC
    4 hours ago













up vote
13
down vote










up vote
13
down vote









if they are paying you with a check they aren't paying you under the table. They use a check when they want a paper trail, they use cash when they don't want to a paper trail.



If they were classifying you as a employee they would have had you complete a W-4 (both Federal and the state version). If they are planning on having work as a contractor they should have had you complete a W-9 form, though the W-9 doesn't have to be completed in the first few days of work.



Because your checks are for hours * rate, with no taxes taken out, you know they are paying you as a contractor.



The accountant isn't going to be much help. Depending on their exact role they may be just keeping the books, or they may be providing advice.



Looking through the state of California website it also appears that California requires contractors to file paperwork to register with the state. That may be your next steps. You don't want to be a contractor, but the state requires you to complete the paperwork. There may be an opportunity there to get your classification corrected.



Regarding employee or contractor:




Q. What can I do if I believe my employer has misclassified me as an
independent contractor and as a result am not being paid any overtime?



A. You can either file a wage claim with the Division of Labor
Standards Enforcement (the Labor Commissioner's Office), or you can
file an action in court to recover the lost overtime premiums. In both
situations, it will first be necessary to determine your employment
status, that is, employee or independent contractor, before the issue
of overtime can be addressed and decided. Additionally, if it is
determined that you are an employee and you no longer work for this
employer, you can make a claim for the waiting time penalty pursuant
to Labor Code Section 203. Eligibility for this penalty is dependent
upon your employment status, as independent contractors are ineligible
for the waiting time penalty.




Yes this FAQ item mentions overtime, but the rest of the FAQ makes it clear that overtime is just one reason employers want to call an employee a contractor.



Unless this is a brand new company, and your boss has no clue about labor laws and taxes, your long term prospects with this company are limited. You have no idea where else they are cutting corners. I would start looking for another job.






share|improve this answer












if they are paying you with a check they aren't paying you under the table. They use a check when they want a paper trail, they use cash when they don't want to a paper trail.



If they were classifying you as a employee they would have had you complete a W-4 (both Federal and the state version). If they are planning on having work as a contractor they should have had you complete a W-9 form, though the W-9 doesn't have to be completed in the first few days of work.



Because your checks are for hours * rate, with no taxes taken out, you know they are paying you as a contractor.



The accountant isn't going to be much help. Depending on their exact role they may be just keeping the books, or they may be providing advice.



Looking through the state of California website it also appears that California requires contractors to file paperwork to register with the state. That may be your next steps. You don't want to be a contractor, but the state requires you to complete the paperwork. There may be an opportunity there to get your classification corrected.



Regarding employee or contractor:




Q. What can I do if I believe my employer has misclassified me as an
independent contractor and as a result am not being paid any overtime?



A. You can either file a wage claim with the Division of Labor
Standards Enforcement (the Labor Commissioner's Office), or you can
file an action in court to recover the lost overtime premiums. In both
situations, it will first be necessary to determine your employment
status, that is, employee or independent contractor, before the issue
of overtime can be addressed and decided. Additionally, if it is
determined that you are an employee and you no longer work for this
employer, you can make a claim for the waiting time penalty pursuant
to Labor Code Section 203. Eligibility for this penalty is dependent
upon your employment status, as independent contractors are ineligible
for the waiting time penalty.




Yes this FAQ item mentions overtime, but the rest of the FAQ makes it clear that overtime is just one reason employers want to call an employee a contractor.



Unless this is a brand new company, and your boss has no clue about labor laws and taxes, your long term prospects with this company are limited. You have no idea where else they are cutting corners. I would start looking for another job.







share|improve this answer












share|improve this answer



share|improve this answer










answered 10 hours ago









mhoran_psprep

41k464148




41k464148







  • 2




    I think "if he treats you like a contractor, then fill out state paperwork to be a contractor" is bad advice. The employer is treating OP like an independent contractor in all the ways that benefit them (not withholding taxes, not paying benefits, not offering paid vacation), while at the same time treating OP like an employee in all the ways that benefits them (requiring specific hours, etc.). I doubt "I'll stop showing up for my scheduled shifts because I'm an independent contractor" will fly here. I do agree with your final line, *start looking for another job".
    – BradC
    4 hours ago













  • 2




    I think "if he treats you like a contractor, then fill out state paperwork to be a contractor" is bad advice. The employer is treating OP like an independent contractor in all the ways that benefit them (not withholding taxes, not paying benefits, not offering paid vacation), while at the same time treating OP like an employee in all the ways that benefits them (requiring specific hours, etc.). I doubt "I'll stop showing up for my scheduled shifts because I'm an independent contractor" will fly here. I do agree with your final line, *start looking for another job".
    – BradC
    4 hours ago








2




2




I think "if he treats you like a contractor, then fill out state paperwork to be a contractor" is bad advice. The employer is treating OP like an independent contractor in all the ways that benefit them (not withholding taxes, not paying benefits, not offering paid vacation), while at the same time treating OP like an employee in all the ways that benefits them (requiring specific hours, etc.). I doubt "I'll stop showing up for my scheduled shifts because I'm an independent contractor" will fly here. I do agree with your final line, *start looking for another job".
– BradC
4 hours ago





I think "if he treats you like a contractor, then fill out state paperwork to be a contractor" is bad advice. The employer is treating OP like an independent contractor in all the ways that benefit them (not withholding taxes, not paying benefits, not offering paid vacation), while at the same time treating OP like an employee in all the ways that benefits them (requiring specific hours, etc.). I doubt "I'll stop showing up for my scheduled shifts because I'm an independent contractor" will fly here. I do agree with your final line, *start looking for another job".
– BradC
4 hours ago











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