California 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.






contractors benefits fulltime taxes california







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  • 2




    Comments are not for extended discussion; this conversation has been moved to chat.
    – Jane S♦
    yesterday










  • What did you do to address the fact you thought you were being employed/paid illegally before you were told you're a contractor?
    – jpmc26
    5 hours ago

















up vote
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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.






contractors benefits fulltime taxes california







share|improve this question









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  • 2




    Comments are not for extended discussion; this conversation has been moved to chat.
    – Jane S♦
    yesterday










  • What did you do to address the fact you thought you were being employed/paid illegally before you were told you're a contractor?
    – jpmc26
    5 hours ago













up vote
84
down vote

favorite
8









up vote
84
down vote

favorite
8






8





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







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




contractors benefits fulltime taxes california






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  • 2




    Comments are not for extended discussion; this conversation has been moved to chat.
    – Jane S♦
    yesterday










  • What did you do to address the fact you thought you were being employed/paid illegally before you were told you're a contractor?
    – jpmc26
    5 hours ago













  • 2




    Comments are not for extended discussion; this conversation has been moved to chat.
    – Jane S♦
    yesterday










  • What did you do to address the fact you thought you were being employed/paid illegally before you were told you're a contractor?
    – jpmc26
    5 hours ago








2




2




Comments are not for extended discussion; this conversation has been moved to chat.
– Jane S♦
yesterday




Comments are not for extended discussion; this conversation has been moved to chat.
– Jane S♦
yesterday












What did you do to address the fact you thought you were being employed/paid illegally before you were told you're a contractor?
– jpmc26
5 hours ago





What did you do to address the fact you thought you were being employed/paid illegally before you were told you're a contractor?
– jpmc26
5 hours ago











5 Answers
5






active

oldest

votes

















up vote
158
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% (1.5 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.






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  • 2




    Comments are not for extended discussion; this conversation has been moved to chat.
    – Snow♦
    20 hours ago










  • "150 times"? Maybe you meant "1.50 times"?
    – Dark Matter
    10 hours ago






  • 1




    @DarkMatter - Daily vs Annual - I would hope for at most x150
    – Greenonline
    9 hours ago


















up vote
72
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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  • 12




    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
    yesterday







  • 10




    @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
    yesterday










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







  • 27




    @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
    yesterday







  • 2




    @Bilkokuya - disagree. TLDR in the q is: "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." - SEE A LAWYER ASAP is in my opinion the only correct answer (caps very much intentional!). The OP is in dangerous territory legally, and discussing this with their boss will likely only impact them negatively. At the very least they should be discussing their options with an accountant who will likely tell them to speak to a lawyer.
    – Miller86
    16 hours ago


















up vote
19
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.






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  • 19




    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
    yesterday


















up vote
13
down vote













The IRS and the federal Department of Labor have a number of good resources about this problem. It's a predicament that has become fairly common, unfortunately, but it's definitely one you can work through so I wouldn't recommend leaving the job simply due to a potential misclassification.



Given the information that you provided, the IRS may consider you a "statutory employee" (which can happen even if your employer considers you a contractor). See this IRS page for details about their various classifications and the tax implications of each.



The Department of Labor looks at it from the point of view of a law called the Fair Labor Standards Act (FLSA). The contractor-vs-employee issue has been the subject of a number of court cases, and the DoL's Fact Sheet 13 lists some of the factors that courts consider "significant" when making this determination.



For a high-level summary in fact-sheet form, see the DoL's infographic or the IRS's Publication 1779.



Your tax liabilities as an employee are very different than as a contractor, so getting an official determination might be your best course of action. Filing form SS-8 with the IRS is the only way I'm aware of to get an absolutely official answer. This process is advertised as taking ~6 months to complete, so it would be best to get the process started soon in hopes it will be complete before tax returns are due in April.



I recommend that until this issue is resolved, do not attempt to do your own income tax returns. Have an accountant review your information and ensure that everything gets filed correctly (standard income/FICA taxes vs. self-employment taxes). You may need to file Form 8919, which is designed for people misclassified as contractors to ensure that their taxes get credited to their Social Security record properly. Filing incorrectly can lead to a huge hassle and expense to correct it later on, so it's safer to get it right the first time, even if it costs a little more up front.



All this is written with respect to federal taxes. Any state-level tax rules that California imposes are actually completely separate issues. You can actually be classified by California as a contractor and by the IRS as an employee (or vice versa). This can get very complicated very quickly, which is why I recommend that you seek professional tax advice from an accountant that has experience in this sort of thing.






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    up vote
    2
    down vote













    Do your research or hire a tax accountant, fast



    Taxation for independent contractors is much more complicated than for employees, and it's clear that you're "out of your depth" here. As an employee you have a sheltered existence because the tax stuff is done automatically for you. As a contractor you have to do it yourself. You must take several actions, on your own, or face fines next April. And April is too late, they require action sooner.



    You will find that since your are paying a lot of your own stuff (hiring accountant, your half of FICA, healthcare, etc.) that your effective salary is lower than you were expecting.






    share|improve this answer
















    • 2




      In my experience, my taxes as an independent contractor weren't much more complicated than my taxes as a regular employee. I did have to fill out another form, but it was straightforward. The pain was estimated taxes, and you may be able to get along without paying them for the first year (the formula to determine underpayment depends on what you made and withheld last year).
      – David Thornley
      14 hours ago










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    5 Answers
    5






    active

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    5 Answers
    5






    active

    oldest

    votes









    active

    oldest

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    active

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    up vote
    158
    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% (1.5 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


















    • 2




      Comments are not for extended discussion; this conversation has been moved to chat.
      – Snow♦
      20 hours ago










    • "150 times"? Maybe you meant "1.50 times"?
      – Dark Matter
      10 hours ago






    • 1




      @DarkMatter - Daily vs Annual - I would hope for at most x150
      – Greenonline
      9 hours ago















    up vote
    158
    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% (1.5 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


















    • 2




      Comments are not for extended discussion; this conversation has been moved to chat.
      – Snow♦
      20 hours ago










    • "150 times"? Maybe you meant "1.50 times"?
      – Dark Matter
      10 hours ago






    • 1




      @DarkMatter - Daily vs Annual - I would hope for at most x150
      – Greenonline
      9 hours ago













    up vote
    158
    down vote










    up vote
    158
    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% (1.5 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% (1.5 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 mins ago









    Nat Bowman

    29216




    29216










    answered yesterday









    gnasher729

    75.3k32137240




    75.3k32137240







    • 2




      Comments are not for extended discussion; this conversation has been moved to chat.
      – Snow♦
      20 hours ago










    • "150 times"? Maybe you meant "1.50 times"?
      – Dark Matter
      10 hours ago






    • 1




      @DarkMatter - Daily vs Annual - I would hope for at most x150
      – Greenonline
      9 hours ago













    • 2




      Comments are not for extended discussion; this conversation has been moved to chat.
      – Snow♦
      20 hours ago










    • "150 times"? Maybe you meant "1.50 times"?
      – Dark Matter
      10 hours ago






    • 1




      @DarkMatter - Daily vs Annual - I would hope for at most x150
      – Greenonline
      9 hours ago








    2




    2




    Comments are not for extended discussion; this conversation has been moved to chat.
    – Snow♦
    20 hours ago




    Comments are not for extended discussion; this conversation has been moved to chat.
    – Snow♦
    20 hours ago












    "150 times"? Maybe you meant "1.50 times"?
    – Dark Matter
    10 hours ago




    "150 times"? Maybe you meant "1.50 times"?
    – Dark Matter
    10 hours ago




    1




    1




    @DarkMatter - Daily vs Annual - I would hope for at most x150
    – Greenonline
    9 hours ago





    @DarkMatter - Daily vs Annual - I would hope for at most x150
    – Greenonline
    9 hours ago













    up vote
    72
    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.













    • 12




      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
      yesterday







    • 10




      @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
      yesterday










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







    • 27




      @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
      yesterday







    • 2




      @Bilkokuya - disagree. TLDR in the q is: "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." - SEE A LAWYER ASAP is in my opinion the only correct answer (caps very much intentional!). The OP is in dangerous territory legally, and discussing this with their boss will likely only impact them negatively. At the very least they should be discussing their options with an accountant who will likely tell them to speak to a lawyer.
      – Miller86
      16 hours ago















    up vote
    72
    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.













    • 12




      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
      yesterday







    • 10




      @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
      yesterday










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







    • 27




      @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
      yesterday







    • 2




      @Bilkokuya - disagree. TLDR in the q is: "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." - SEE A LAWYER ASAP is in my opinion the only correct answer (caps very much intentional!). The OP is in dangerous territory legally, and discussing this with their boss will likely only impact them negatively. At the very least they should be discussing their options with an accountant who will likely tell them to speak to a lawyer.
      – Miller86
      16 hours ago













    up vote
    72
    down vote










    up vote
    72
    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 yesterday









    user9313

    51113




    51113




    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.







    • 12




      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
      yesterday







    • 10




      @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
      yesterday










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







    • 27




      @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
      yesterday







    • 2




      @Bilkokuya - disagree. TLDR in the q is: "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." - SEE A LAWYER ASAP is in my opinion the only correct answer (caps very much intentional!). The OP is in dangerous territory legally, and discussing this with their boss will likely only impact them negatively. At the very least they should be discussing their options with an accountant who will likely tell them to speak to a lawyer.
      – Miller86
      16 hours ago













    • 12




      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
      yesterday







    • 10




      @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
      yesterday










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







    • 27




      @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
      yesterday







    • 2




      @Bilkokuya - disagree. TLDR in the q is: "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." - SEE A LAWYER ASAP is in my opinion the only correct answer (caps very much intentional!). The OP is in dangerous territory legally, and discussing this with their boss will likely only impact them negatively. At the very least they should be discussing their options with an accountant who will likely tell them to speak to a lawyer.
      – Miller86
      16 hours ago








    12




    12




    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
    yesterday





    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
    yesterday





    10




    10




    @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
    yesterday




    @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
    yesterday












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





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





    27




    27




    @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
    yesterday





    @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
    yesterday





    2




    2




    @Bilkokuya - disagree. TLDR in the q is: "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." - SEE A LAWYER ASAP is in my opinion the only correct answer (caps very much intentional!). The OP is in dangerous territory legally, and discussing this with their boss will likely only impact them negatively. At the very least they should be discussing their options with an accountant who will likely tell them to speak to a lawyer.
    – Miller86
    16 hours ago





    @Bilkokuya - disagree. TLDR in the q is: "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." - SEE A LAWYER ASAP is in my opinion the only correct answer (caps very much intentional!). The OP is in dangerous territory legally, and discussing this with their boss will likely only impact them negatively. At the very least they should be discussing their options with an accountant who will likely tell them to speak to a lawyer.
    – Miller86
    16 hours ago











    up vote
    19
    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
















    • 19




      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
      yesterday















    up vote
    19
    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
















    • 19




      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
      yesterday













    up vote
    19
    down vote










    up vote
    19
    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 yesterday









    mhoran_psprep

    41k464148




    41k464148







    • 19




      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
      yesterday













    • 19




      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
      yesterday








    19




    19




    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
    yesterday





    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
    yesterday











    up vote
    13
    down vote













    The IRS and the federal Department of Labor have a number of good resources about this problem. It's a predicament that has become fairly common, unfortunately, but it's definitely one you can work through so I wouldn't recommend leaving the job simply due to a potential misclassification.



    Given the information that you provided, the IRS may consider you a "statutory employee" (which can happen even if your employer considers you a contractor). See this IRS page for details about their various classifications and the tax implications of each.



    The Department of Labor looks at it from the point of view of a law called the Fair Labor Standards Act (FLSA). The contractor-vs-employee issue has been the subject of a number of court cases, and the DoL's Fact Sheet 13 lists some of the factors that courts consider "significant" when making this determination.



    For a high-level summary in fact-sheet form, see the DoL's infographic or the IRS's Publication 1779.



    Your tax liabilities as an employee are very different than as a contractor, so getting an official determination might be your best course of action. Filing form SS-8 with the IRS is the only way I'm aware of to get an absolutely official answer. This process is advertised as taking ~6 months to complete, so it would be best to get the process started soon in hopes it will be complete before tax returns are due in April.



    I recommend that until this issue is resolved, do not attempt to do your own income tax returns. Have an accountant review your information and ensure that everything gets filed correctly (standard income/FICA taxes vs. self-employment taxes). You may need to file Form 8919, which is designed for people misclassified as contractors to ensure that their taxes get credited to their Social Security record properly. Filing incorrectly can lead to a huge hassle and expense to correct it later on, so it's safer to get it right the first time, even if it costs a little more up front.



    All this is written with respect to federal taxes. Any state-level tax rules that California imposes are actually completely separate issues. You can actually be classified by California as a contractor and by the IRS as an employee (or vice versa). This can get very complicated very quickly, which is why I recommend that you seek professional tax advice from an accountant that has experience in this sort of thing.






    share|improve this answer
























      up vote
      13
      down vote













      The IRS and the federal Department of Labor have a number of good resources about this problem. It's a predicament that has become fairly common, unfortunately, but it's definitely one you can work through so I wouldn't recommend leaving the job simply due to a potential misclassification.



      Given the information that you provided, the IRS may consider you a "statutory employee" (which can happen even if your employer considers you a contractor). See this IRS page for details about their various classifications and the tax implications of each.



      The Department of Labor looks at it from the point of view of a law called the Fair Labor Standards Act (FLSA). The contractor-vs-employee issue has been the subject of a number of court cases, and the DoL's Fact Sheet 13 lists some of the factors that courts consider "significant" when making this determination.



      For a high-level summary in fact-sheet form, see the DoL's infographic or the IRS's Publication 1779.



      Your tax liabilities as an employee are very different than as a contractor, so getting an official determination might be your best course of action. Filing form SS-8 with the IRS is the only way I'm aware of to get an absolutely official answer. This process is advertised as taking ~6 months to complete, so it would be best to get the process started soon in hopes it will be complete before tax returns are due in April.



      I recommend that until this issue is resolved, do not attempt to do your own income tax returns. Have an accountant review your information and ensure that everything gets filed correctly (standard income/FICA taxes vs. self-employment taxes). You may need to file Form 8919, which is designed for people misclassified as contractors to ensure that their taxes get credited to their Social Security record properly. Filing incorrectly can lead to a huge hassle and expense to correct it later on, so it's safer to get it right the first time, even if it costs a little more up front.



      All this is written with respect to federal taxes. Any state-level tax rules that California imposes are actually completely separate issues. You can actually be classified by California as a contractor and by the IRS as an employee (or vice versa). This can get very complicated very quickly, which is why I recommend that you seek professional tax advice from an accountant that has experience in this sort of thing.






      share|improve this answer






















        up vote
        13
        down vote










        up vote
        13
        down vote









        The IRS and the federal Department of Labor have a number of good resources about this problem. It's a predicament that has become fairly common, unfortunately, but it's definitely one you can work through so I wouldn't recommend leaving the job simply due to a potential misclassification.



        Given the information that you provided, the IRS may consider you a "statutory employee" (which can happen even if your employer considers you a contractor). See this IRS page for details about their various classifications and the tax implications of each.



        The Department of Labor looks at it from the point of view of a law called the Fair Labor Standards Act (FLSA). The contractor-vs-employee issue has been the subject of a number of court cases, and the DoL's Fact Sheet 13 lists some of the factors that courts consider "significant" when making this determination.



        For a high-level summary in fact-sheet form, see the DoL's infographic or the IRS's Publication 1779.



        Your tax liabilities as an employee are very different than as a contractor, so getting an official determination might be your best course of action. Filing form SS-8 with the IRS is the only way I'm aware of to get an absolutely official answer. This process is advertised as taking ~6 months to complete, so it would be best to get the process started soon in hopes it will be complete before tax returns are due in April.



        I recommend that until this issue is resolved, do not attempt to do your own income tax returns. Have an accountant review your information and ensure that everything gets filed correctly (standard income/FICA taxes vs. self-employment taxes). You may need to file Form 8919, which is designed for people misclassified as contractors to ensure that their taxes get credited to their Social Security record properly. Filing incorrectly can lead to a huge hassle and expense to correct it later on, so it's safer to get it right the first time, even if it costs a little more up front.



        All this is written with respect to federal taxes. Any state-level tax rules that California imposes are actually completely separate issues. You can actually be classified by California as a contractor and by the IRS as an employee (or vice versa). This can get very complicated very quickly, which is why I recommend that you seek professional tax advice from an accountant that has experience in this sort of thing.






        share|improve this answer












        The IRS and the federal Department of Labor have a number of good resources about this problem. It's a predicament that has become fairly common, unfortunately, but it's definitely one you can work through so I wouldn't recommend leaving the job simply due to a potential misclassification.



        Given the information that you provided, the IRS may consider you a "statutory employee" (which can happen even if your employer considers you a contractor). See this IRS page for details about their various classifications and the tax implications of each.



        The Department of Labor looks at it from the point of view of a law called the Fair Labor Standards Act (FLSA). The contractor-vs-employee issue has been the subject of a number of court cases, and the DoL's Fact Sheet 13 lists some of the factors that courts consider "significant" when making this determination.



        For a high-level summary in fact-sheet form, see the DoL's infographic or the IRS's Publication 1779.



        Your tax liabilities as an employee are very different than as a contractor, so getting an official determination might be your best course of action. Filing form SS-8 with the IRS is the only way I'm aware of to get an absolutely official answer. This process is advertised as taking ~6 months to complete, so it would be best to get the process started soon in hopes it will be complete before tax returns are due in April.



        I recommend that until this issue is resolved, do not attempt to do your own income tax returns. Have an accountant review your information and ensure that everything gets filed correctly (standard income/FICA taxes vs. self-employment taxes). You may need to file Form 8919, which is designed for people misclassified as contractors to ensure that their taxes get credited to their Social Security record properly. Filing incorrectly can lead to a huge hassle and expense to correct it later on, so it's safer to get it right the first time, even if it costs a little more up front.



        All this is written with respect to federal taxes. Any state-level tax rules that California imposes are actually completely separate issues. You can actually be classified by California as a contractor and by the IRS as an employee (or vice versa). This can get very complicated very quickly, which is why I recommend that you seek professional tax advice from an accountant that has experience in this sort of thing.







        share|improve this answer












        share|improve this answer



        share|improve this answer










        answered yesterday









        bta

        92559




        92559




















            up vote
            2
            down vote













            Do your research or hire a tax accountant, fast



            Taxation for independent contractors is much more complicated than for employees, and it's clear that you're "out of your depth" here. As an employee you have a sheltered existence because the tax stuff is done automatically for you. As a contractor you have to do it yourself. You must take several actions, on your own, or face fines next April. And April is too late, they require action sooner.



            You will find that since your are paying a lot of your own stuff (hiring accountant, your half of FICA, healthcare, etc.) that your effective salary is lower than you were expecting.






            share|improve this answer
















            • 2




              In my experience, my taxes as an independent contractor weren't much more complicated than my taxes as a regular employee. I did have to fill out another form, but it was straightforward. The pain was estimated taxes, and you may be able to get along without paying them for the first year (the formula to determine underpayment depends on what you made and withheld last year).
              – David Thornley
              14 hours ago














            up vote
            2
            down vote













            Do your research or hire a tax accountant, fast



            Taxation for independent contractors is much more complicated than for employees, and it's clear that you're "out of your depth" here. As an employee you have a sheltered existence because the tax stuff is done automatically for you. As a contractor you have to do it yourself. You must take several actions, on your own, or face fines next April. And April is too late, they require action sooner.



            You will find that since your are paying a lot of your own stuff (hiring accountant, your half of FICA, healthcare, etc.) that your effective salary is lower than you were expecting.






            share|improve this answer
















            • 2




              In my experience, my taxes as an independent contractor weren't much more complicated than my taxes as a regular employee. I did have to fill out another form, but it was straightforward. The pain was estimated taxes, and you may be able to get along without paying them for the first year (the formula to determine underpayment depends on what you made and withheld last year).
              – David Thornley
              14 hours ago












            up vote
            2
            down vote










            up vote
            2
            down vote









            Do your research or hire a tax accountant, fast



            Taxation for independent contractors is much more complicated than for employees, and it's clear that you're "out of your depth" here. As an employee you have a sheltered existence because the tax stuff is done automatically for you. As a contractor you have to do it yourself. You must take several actions, on your own, or face fines next April. And April is too late, they require action sooner.



            You will find that since your are paying a lot of your own stuff (hiring accountant, your half of FICA, healthcare, etc.) that your effective salary is lower than you were expecting.






            share|improve this answer












            Do your research or hire a tax accountant, fast



            Taxation for independent contractors is much more complicated than for employees, and it's clear that you're "out of your depth" here. As an employee you have a sheltered existence because the tax stuff is done automatically for you. As a contractor you have to do it yourself. You must take several actions, on your own, or face fines next April. And April is too late, they require action sooner.



            You will find that since your are paying a lot of your own stuff (hiring accountant, your half of FICA, healthcare, etc.) that your effective salary is lower than you were expecting.







            share|improve this answer












            share|improve this answer



            share|improve this answer










            answered 22 hours ago









            Harper

            2,6311411




            2,6311411







            • 2




              In my experience, my taxes as an independent contractor weren't much more complicated than my taxes as a regular employee. I did have to fill out another form, but it was straightforward. The pain was estimated taxes, and you may be able to get along without paying them for the first year (the formula to determine underpayment depends on what you made and withheld last year).
              – David Thornley
              14 hours ago












            • 2




              In my experience, my taxes as an independent contractor weren't much more complicated than my taxes as a regular employee. I did have to fill out another form, but it was straightforward. The pain was estimated taxes, and you may be able to get along without paying them for the first year (the formula to determine underpayment depends on what you made and withheld last year).
              – David Thornley
              14 hours ago







            2




            2




            In my experience, my taxes as an independent contractor weren't much more complicated than my taxes as a regular employee. I did have to fill out another form, but it was straightforward. The pain was estimated taxes, and you may be able to get along without paying them for the first year (the formula to determine underpayment depends on what you made and withheld last year).
            – David Thornley
            14 hours ago




            In my experience, my taxes as an independent contractor weren't much more complicated than my taxes as a regular employee. I did have to fill out another form, but it was straightforward. The pain was estimated taxes, and you may be able to get along without paying them for the first year (the formula to determine underpayment depends on what you made and withheld last year).
            – David Thornley
            14 hours ago










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