joemilitary
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Post by joemilitary on Aug 5, 2015 19:49:51 GMT -5
UPDATE: Well, the independent contracting job people never called my wife back.....but she now has another job offer from a professional place. $35,000 per year. It's Sunday- Thursday schedule. But it's a hospital type place. Seems like it will be a good fit. Way better than the independent contractor thing.....she should have a chance to get another license thing......starts 17 Oct!
-------------------------------------------------------------------------------------------------------- So my wife got a job pretty quick after our move from Europe (4 weeks), highest paid job she has gotten so far too
Just one problem / question---she will be an independent contractor....never dealt with this before- pros? cons? I figure people do it and it's a job....but not sure what records need to be kept? Questions to ask employer etc.? I think we have some independent contractors out there in YM?
Background:
My wife works as a Social Worker. The place she applied to work at seems in disarray. In their defense they are standing up a whole new office in this area--so hiring a lot of people, overseeing office construction, etc. So hopefully this is why. But some things seem confused.
The "interview" lasted all of 10 minutes until it was obvious to my wife she had the job. It seems the "interview" was more just to see if she and the boss would get along, not too many questions asked about wife's qualifications (interviewer said she liked wife's resume). When wife applied, the job listing didn't mention being an independent contractor, during interview that was never mentioned either. Wife assumed it was a "regular" job. Guess in the chaos the interviewer didn't mention some things.
My wife was offered and accepted a salary at the interview (maybe could have negotiated more but happy to get job at pretty good wage already). She was quoted a number for an annual salary. Still under assumption this was a "regular" job.
They have to run a background check and stuff on my wife (official transcripts, etc.), but there was training 2 days after her interview so they asked my wife if she could attend while things were processing. The training was at the corporate office 90 minutes away. my wife figured she would try to be cooperative and show enthusiasm for the job and agreed and figured to discuss travel reimbursement later and pay for the training later.
Once she arrived at the training (today), she discovered they want to hire her as an "independent contractor" - the little my wife learned today was: she needs to get insurance, use her own computer, use her own car to transport clients and meet clients at their house (and not reimbursed for travel---need to expense it on taxes?), pay her own taxes, track expenses, etc.
Oh, and no one that attended the training today would be paid, because if they didn't actually accept the job / pass the background check the company would have to take the money back for the training----WTE??
Also she would be paid MINIMUM wage for future trainings--different pay for training vs. "normal" work? So I am confused---they quoted her an annual salary at the interview, but trainings are minimum wage? And no pay at all for travel today?
A job right now is better than no job. It also would be good experience for wife (been out of social work for 4 years). Also hoping the dysfunction of the company is due to the rapid expansion. Also this expansion may lead to better opportunity for wife down the line...... So currently planning to suck this all up and figure it out......but curious out there--
1) Thoughts on the overall situation?
2) Is it normal not to mention being an independent contractor in job announcement or interview?
3) Ramifications of being an independent contractor vice "regular" employee? Expenses to track? How to pay taxes? etc......
4) Anything else we should know?
thanks
ETA- she was told in 6 months she would qualify for benefits, which I thought was possible for an independent contractor?
ETA- she would be a 1099 Independent Contractor.....whatever that means? (are there different types of independent contractors?)
ETA 2 - Also we will probably only be here a limited time (13 months).......so other job possibilities may take a while.......
ETA 3 - She would be something called a Mental Health Professional Masters Level, it's a lot of going to client's homes and in the community and work with them on goals & behavior modification type stuff--dealing with people & kids with mental health issues.
ETA 4 - The training today was more admin stuff- how to fill in time sheets and how to write notes for the cases
ETA 5 - My wife wasn't the only one that attended the training that was surprised there was no pay for the training today, all the other attendees assumed they would get paid too
ETA 6 - to help with numbers- the "salary" was $42,000
ETA - Also wife just remembered during the training today they mentioned that my wife would have to give 2 weeks notice before she quits......but looking up on the web, independent contractors are not required to give 2 weeks notice?
ETA- today wife was told verbally she is not an independent contractor. We remain skeptical and will follow up---stil not sure about training reimbursement or use of her own car to transport clients.
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Deleted
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Post by Deleted on Aug 5, 2015 20:02:22 GMT -5
No. Sorry, I'd run. Disfunctional social service organization. Individual liability in this situation. Even if it WAS a true independent contractor position... But it honestly doesn't sound like it would pass the test. It sounds like they want an employee with no payrol, comp or liability... I would not take this job based on what you wrote.
Also not not telling her any of this until unpaid training is shady.
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MarleyKeezy78
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Post by MarleyKeezy78 on Aug 5, 2015 20:05:40 GMT -5
I did that once and had to track my quarterly taxes, saved the money in an account and had to make sure I paid them in a timely fashion. It seems I also had to have a tax id number, but I had one from a previous small business venture so it wasn't a issue. My FIL helped me with that stuff since he does our taxes so maybe someone here in accounting can guide you in the right direction.
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Deleted
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Post by Deleted on Aug 5, 2015 20:09:57 GMT -5
I didn't need a tax Id when I was a contractor. I used my SS. Yes I kept track of expenses and paid quarterly taxes if needed.
But this really doesn't sound like a great position to me...
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joemilitary
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Post by joemilitary on Aug 5, 2015 20:12:06 GMT -5
Thanks all. The other weird thing is her "boss" mentioned she would be qualified for benefits in 6 months.....but my understanding is an independent has to do their own benefits?
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kjto1
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Post by kjto1 on Aug 5, 2015 20:12:49 GMT -5
I'm pretty sure the dysfunction of the company is not due to the expansion. Usually companies try to "cheap out" by 1099ing employees. I would recommend getting a CPA, and meet with them to find out EVERYTHING that she should track for tax time. She will have to pay the employer portion of FICA and Medicare. Track all her mileage.
Does she need to purchase a specific laptop? Any special software? Does she need a dedicated cell phone for business?
Does she need special liability insurance for job issues? Special insurance for using your person vehicle as a business vehicle? Is there a chance she could get sued when meeting with clients - does she need to for an LLC to protect your personal assets? Then, that would open other issues of paying herself payroll - Fed and state withholding taxes, and unemployment taxes. What if she gets hurt on the job - work comp and disability?
They didn't mention the independent contractor part in the advertisement, because people don't want to mess with it. They are trying to trick people into the jobs - like they did your wife.
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msventoux
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Post by msventoux on Aug 5, 2015 20:17:17 GMT -5
I would have her run very fast the other way. Being an independent contractor isn't necessarily a huge deal, but the way this company has handled everything so far is a huge red flag.
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Deleted
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Post by Deleted on Aug 5, 2015 20:20:42 GMT -5
I would have her run very fast the other way. Being an independent contractor isn't necessarily a huge deal, but the way this company has handled everything so far is a huge red flag.
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joemilitary
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Post by joemilitary on Aug 5, 2015 20:21:59 GMT -5
Yes, she would be a 1099 Independent Contractor.....whatever that means?
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bean29
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Post by bean29 on Aug 5, 2015 20:22:09 GMT -5
www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-DefinedPeople such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax. If you are an independent contractor, you are self-employed. To find out what your tax obligations are, visit the Self-Employed Tax Center. You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed I really don't think Social Worker is a job that meets the definition of an Independent contractor. I have one a stint as and IC myself, and I have worked for a nonprofit. I will be back with more later...have to take my Dog out right now. I think you are looking at a Nonprofit in trouble with their funding source. If you wife does take the position, she needs to be paid weekly or bi-weekly...and and, if she is unpaid or a check bounces, she does no more work. BTDT.
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joemilitary
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Post by joemilitary on Aug 5, 2015 20:22:37 GMT -5
Also we will probably only be here a limited time (13 months).......so other job possibilities may take a while.......
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Deleted
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Post by Deleted on Aug 5, 2015 20:28:51 GMT -5
Yes, she would be a 1099 Independent Contractor.....whatever that means? What that means is instead of a W2 at the end of the year she gets a 1099 in the amount of her gross pay, which the company paid to her. She is responsible for all taxes, including as people said the 'other half' of medi/SS. Plus liability insurance, etc. There is a reason IC seem to have higher pay. The company is paying nothing and the IC has more business expense. Its not IC in general that is the issue though, but THIS situation. As said, red flags all over the place.
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Shooby
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Post by Shooby on Aug 5, 2015 20:29:26 GMT -5
You need to earn a lot more as an IC just to break even and offset expenses. If she wants to work for them then go back in and say you want gull time with Bennies. If she wants to n be IC then she needs to clear think about the terms and spell it out in a contract.
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Deleted
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Post by Deleted on Aug 5, 2015 20:31:15 GMT -5
Is it like a TSS or Mobile Therapy type position?
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Works4me
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Post by Works4me on Aug 5, 2015 20:37:22 GMT -5
Medical Social Worker here, semi-retired due to lupus - personally, I would not do it. She will need to allow at least 35% and as much as 50% for taxes and other expenses. How great is 65-50% of her salary? Also, organizations like that will nickle and dime her to death as was demonstrated today. Every community has one or two social service organizations that no one wants to work for and I am willing to bet that they want to hire her before she researches them.
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mmhmm
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Post by mmhmm on Aug 5, 2015 20:43:54 GMT -5
Personally, I couldn't have gotten out the door fast enough. This whole thing sounds shady as all get-out to me. I've worked as both an independent contractor and a hospital employee (sometimes, at the same time). The costs involved for an independent contractor have to be very carefully considered. I'm having trouble figuring out how this company plans to treat social workers as independent contractors! It doesn't seem, to me, like the kind of work that fits well into that concept. All-in-all, it just smells wrong to me. I'd do a lot of questioning and digging before I took this offer, were I your wife.
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joemilitary
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Post by joemilitary on Aug 5, 2015 20:44:14 GMT -5
Is it like a TSS or Mobile Therapy type position?
No idea what TSS is
She would be something called a Mental Health Professional Masters Level, it's a lot of going to client's homes and in the community and work with them on goals & behavior modification type stuff--dealing with people & kids with mental health issues.
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milee
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Post by milee on Aug 5, 2015 20:57:45 GMT -5
CPA here. Even though taxes aren't my specialty, I'm an employer and have dealt extensively with employment law. Unless there are some huge details missing from this story, there's no way that classifying a social worker as an Independent Contractor passes the smell test with either the IRS or the DOL.
Either this employer is totally clueless or dishonest. Just the fact that they're requiring specific training for her demonstrates that they exert a high level of control over the details of how she performs her function, which means that alone would make her an employee in most cases. The fact that they're talking about paying her an "annual salary" for set hours also adds to the argument that she would be an employee, not independent contractor.
BTW, I'm guessing if you start checking you'll find that just the insurance she'd need to carry were she to do work like this as an independent contractor is breathtakingly expensive unless she's part of some professional organization that offers it to members. She'd need not only liability insurance for professional malpractice, but she'll also need special car insurance because standard car insurance does not cover accidents incurred while using your private vehicle to perform a work function. And car insurers research this vigorously, mainly due to the increase in people using their cars to drive for Uber, so don't think they won't find out if she was using the car for work. Plus, if - God forbid - a client was injured in the car accident, those injuries wouldn't be covered under her standard personal car insurance since it was work related.
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milee
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Post by milee on Aug 5, 2015 20:59:57 GMT -5
Oh, and I have nothing against working as an independent contractor and have done it myself. But I didn't need the liability and car insurance she's going to need and even so I charged between two and three times the amount I made in salary for similar work. Just to give you a benchmark of what independent contractors make versus employees.
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bean29
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Post by bean29 on Aug 5, 2015 21:07:02 GMT -5
A social worker driving clients around that is self employed? Was your wife asked to provide proof of insurance that covers clients as passengers...at lease some personal auto policies would exclude this as needing commercial auto coverage. Most funding sources that would pay for this work, would expect the social worker to have insurance for themselves and the client. That leads us back to them not passing a smell test.
I would bet the agency has been paid for work they have been found to not have performed properly. Their workmen's comp insurance may have been cancelled for non-payment and same with the commercial auto policy. Google the agency name and the names of any directors and board members.
Your wifes wages should cover min. wage + employer FICA+workmens comp insurance + general liability+ auto, and the standard milage rate for any transportation she provides.
She should keep a mileage log, and a log of all her time working. She must be paid at least minimum wage for all the hours she puts in.
I get why she might want to take it on a trial basis...but don't let them run her ragged with no pay. It has to be a 1-2 week trial, and she is paid at least minimum wage + standard mileage rate for miles traveled.
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Deleted
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Post by Deleted on Aug 5, 2015 21:09:13 GMT -5
Is it like a TSS or Mobile Therapy type position?
No idea what TSS is
She would be something called a Mental Health Professional Masters Level, it's a lot of going to client's homes and in the community and work with them on goals & behavior modification type stuff--dealing with people & kids with mental health issues.
Yes, TSS Therapudic support person or Mobile therapy is the same here. I could see how they could IC that. But she won't get an annual salary. At best that is speculation. She will not be paid for travel time. If the client is a no show, and this happens a lot, she will not get to bill at all. It is actually possible to lose money at this. Particularly with an organization that is as shady and disorganized as you describe. Huge turnover in these positions around here.
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sarcasticgirl
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Post by sarcasticgirl on Aug 5, 2015 21:16:22 GMT -5
It has been a looooong time since i did a 1099... But I do remember at the end of the day, I only actually got about 50% of what i was paid.
So if her offer is for 100k, I would go into it thinking that you'll only see 50k of that. If you are both comfortable with it... then go for it. though this whole deal sounds SHADY!
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joemilitary
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Post by joemilitary on Aug 5, 2015 21:20:04 GMT -5
CPA here. Even though taxes aren't my specialty, I'm an employer and have dealt extensively with employment law. Unless there are some huge details missing from this story, there's no way that classifying a social worker as an Independent Contractor passes the smell test with either the IRS or the DOL.
Either this employer is totally clueless or dishonest. Just the fact that they're requiring specific training for her demonstrates that they exert a high level of control over the details of how she performs her function, which means that alone would make her an employee in most cases. The fact that they're talking about paying her an "annual salary" for set hours also adds to the argument that she would be an employee, not independent contractor.
BTW, I'm guessing if you start checking you'll find that just the insurance she'd need to carry were she to do work like this as an independent contractor is breathtakingly expensive unless she's part of some professional organization that offers it to members. She'd need not only liability insurance for professional malpractice, but she'll also need special car insurance because standard car insurance does not cover accidents incurred while using your private vehicle to perform a work function. And car insurers research this vigorously, mainly due to the increase in people using their cars to drive for Uber, so don't think they won't find out if she was using the car for work. Plus, if - God forbid - a client was injured in the car accident, those injuries wouldn't be covered under her standard personal car insurance since it was work related.
The training today was more admin stuff- how to fill in time sheets and how to write notes for the cases
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milee
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Post by milee on Aug 5, 2015 21:22:41 GMT -5
CPA here. Even though taxes aren't my specialty, I'm an employer and have dealt extensively with employment law. Unless there are some huge details missing from this story, there's no way that classifying a social worker as an Independent Contractor passes the smell test with either the IRS or the DOL.
Either this employer is totally clueless or dishonest. Just the fact that they're requiring specific training for her demonstrates that they exert a high level of control over the details of how she performs her function, which means that alone would make her an employee in most cases. The fact that they're talking about paying her an "annual salary" for set hours also adds to the argument that she would be an employee, not independent contractor.
BTW, I'm guessing if you start checking you'll find that just the insurance she'd need to carry were she to do work like this as an independent contractor is breathtakingly expensive unless she's part of some professional organization that offers it to members. She'd need not only liability insurance for professional malpractice, but she'll also need special car insurance because standard car insurance does not cover accidents incurred while using your private vehicle to perform a work function. And car insurers research this vigorously, mainly due to the increase in people using their cars to drive for Uber, so don't think they won't find out if she was using the car for work. Plus, if - God forbid - a client was injured in the car accident, those injuries wouldn't be covered under her standard personal car insurance since it was work related.
The training today was more admin stuff- how to fill in time sheets and how to write notes for the cases
OK, could make sense.
How exactly does the "annual salary" work? Does she work set hours and get paid that amount or is she only paid for work completed? Does she already know how to do this work - ie: they give no direction or guidance and she just does it - or do they tell her exactly what work is to be done with each client?
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joemilitary
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Post by joemilitary on Aug 5, 2015 21:28:19 GMT -5
The training today was more admin stuff- how to fill in time sheets and how to write notes for the cases
OK, could make sense.
How exactly does the "annual salary" work? Does she work set hours and get paid that amount or is she only paid for work completed? Does she already know how to do this work - ie: they give no direction or guidance and she just does it - or do they tell her exactly what work is to be done with each client?
In regards to the "annual salary"--it all happened fast, but basically the interviewer said something to the affect of "well you have a Masters degree and I am starting all my Masters workers at a salary of $42,000
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Deleted
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Post by Deleted on Aug 5, 2015 21:30:55 GMT -5
Salary X and IC do not seem compatible.
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joemilitary
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Post by joemilitary on Aug 5, 2015 21:33:41 GMT -5
I added the actual salary of $42,000, so that might help with other numbers, etc.
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joemilitary
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Post by joemilitary on Aug 5, 2015 21:47:17 GMT -5
Also wife just remembered during the training today they mentioned that my wife would have to give 2 weeks notice before she quits......but looking up on the web, independent contractors are not required to give 2 weeks notice?
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Works4me
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Post by Works4me on Aug 5, 2015 21:55:19 GMT -5
So, $42,000 is $21,000 to $27,300 after expenses?
Is it worth it for her to to make between $10 and $13.50 per hour?
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milee
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Post by milee on Aug 5, 2015 21:56:20 GMT -5
OK, could make sense.
How exactly does the "annual salary" work? Does she work set hours and get paid that amount or is she only paid for work completed? Does she already know how to do this work - ie: they give no direction or guidance and she just does it - or do they tell her exactly what work is to be done with each client?
In regards to the "annual salary"--it all happened fast, but basically the interviewer said something to the affect of "well you have a Masters degree and I am starting all my Masters workers at a salary of $42,000
I added the bold to show what I'm referring to. Independent contractors aren't paid a "salary" and they aren't "workers" of a company. ICs are generally paid for a task, project, completed service, etc. With what it sounds like your wife would be doing, the pay for an IC would be something like X per hour for each hour of therapy provided, not an annual salary.
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