Update:new job- questions about being Independent Contractor

[Deleted]

I would guess very few people make it six months. Will they give her turnover statistics? 

The guy we used to employ at 18$ an hour sometimes subs for us now, at 25-30$ an hour. 

[Deleted]

Independent contractors do not have to itemize or go over a certain %. For all intents and purposes she will have her own business. Expenses come off profit loss.

[Opti]

Aug 5, 2015 20:30:51 GMT -5 @southernsusana said:

Social work doesn't seem like a 1099 job.  Like teaching, it is relatively low-paid, but the benefits, etc. are supposed to make up for it.

I actually wouldn't take a job like the one you describe.  She owes at least 15% of her salary off the top for SS.  She needs to get professional liability insurance pronto.  She has to file her own estimated federal/state taxes quarterly.  She has to track job related expenses that might have to meet a certain threshhold (never been a 1099 employee so I don't know if they don't have to meet that), etc.  I am guessing she gets zero toward retirement.

What is the upside of this job other than she has a job at a decent salary IF she had benefits?

The world is changing, especially the US, jobs, and healthcare. The healthcare industry overall is changing to meet Romney-care, ACA, the baby Boom bump. Things that used to be salaried become 1099. That's the way it is. I've lived this in IT, as a UNIX admin, etc. Its coming to other professions and has already hit healthcare in things like X-rays (portable to facilities), etc.

Remember the market rate mantra of YM? Well, welcome to the downside of that belief system - market rate and no employment security.

Whether your wife takes it or not, she should be willing to walk away if the nonsense gets too much, and take notes. Odds are this company is not the only one that 1099s social workers, or will be in the future.

[Opti]

Aug 6, 2015 5:53:03 GMT -5 marvholly said:

The whole concept is WAAAY shady and doe NOT pass the IRS or DOL rules for independent contractors. Late DH had a couple such offers as a salesperson (frequently are ICs) and he (we) turned them down as costing us WAAAAY too much.

ICs NEVER get benefits - NO medical, No insurance of any type, NO retirement, NO holiday or vacation pay ................

ICs MUST pay ALL their own expenses: both sides of soc & medicare taxes, liability insurance, ALL auto expenses, auto insurance................. 

There are lots of places that hire ICs that do not meet IRS rules. They grow like mushrooms when it is an employers market and employment is down. For people who need jobs, some, like me in the past, have done this because IMO it was still better then working at Walmart. And more resume building as well.

But yes definitely look at the downsides. And remember to include the important downside of being paid late and pay periods changing to benefit the employer.

[TheOtherMe]

Aug 10, 2015 21:32:08 GMT -5 @southernsusana said:

Aug 10, 2015 21:20:50 GMT -5 oped said:

Independent contractors do not have to itemize or go over a certain %. For all intents and purposes she will have her own business. Expenses come off profit loss.

Good to know.  I have never claimed to know how that part works.

Except how can you claim those expenses without some sort of itemizing?  Wouldn't you fill out a schedule of some sort?

You complete a Schedule C on your tax return.  That is where you show your income and list your various categories of expenses.  It has some line items already completed but it was made before things like internet.  There is space to add your own line items. 

If you have your taxes prepared, you will be charged for the preparation of this form.

[msventoux]

Aug 10, 2015 21:52:39 GMT -5 @southernsusana said:

Aug 10, 2015 21:44:50 GMT -5 TheOtherMe said:

You complete a Schedule C on your tax return.  That is where you show your income and list your various categories of expenses.  It has some line items already completed but it was made before things like internet.  There is space to add your own line items. 

If you have your taxes prepared, you will be charged for the preparation of this form.

So filling out a schedule C isn't the same thing as itemizing?  I learn something new every day!  

It's a question of terminology.    To the world at large, itemizing means to make a detailed list or break down something into smaller parts.  Tax people consider itemizing to be specifically completing Schedule A - Itemized Deductions on the 1040 where taxpayers list their miscellaneous itemized deductions like medical, real estate taxes, mortgage interest, etc.  You do list out your business expenses on Schedule C, but tax people generally wouldn't refer to it as itemizing. 

[emma1420]

Aug 10, 2015 21:36:15 GMT -5 Opti said:

Aug 10, 2015 21:13:29 GMT -5 emma1420 said:

I would definitely be asking if she will need to carry her own liability insurance.  But, I suspect after she pays both portions of the appropriate taxes, traveling time, and any sort of insurance she may need, she would be lucky to make minimum wage.

The fact they pay 1099 employees the same as W2 employees is a huge red flag on top of everything else that has been described.  i work in a very different field, and we use some 1099 employees.  They are paid almost double a W2 employee because of all the additional costs they incur and we only pay them for the time on a specific project.  

And I would be shocked if this job turns into a W2 job later on down the road.  It might, but why are they waiting six months to hire W2 employees?

Easy, peasy. 1099 work is a trial  period. No messy firing issues if the personality fit does not work out or the person is incompetent.

Almost every job I've been exposed to has some sort of probationary period specifically for the reason.

In this case, I suspect that talking about becoming a W2 employee is a carrot that gets dangled in front of all their 1099 employees.  If they do open up a W2 position, then I suspect the competition will be fierce.  Because who on earth would continue to pay all their own expenses when the rate of pay is apparently exactly the same for W2 and 1099 employees.  

[TheOtherMe]

Aug 10, 2015 21:52:39 GMT -5 @southernsusana said:

Aug 10, 2015 21:44:50 GMT -5 TheOtherMe said:

You complete a Schedule C on your tax return.  That is where you show your income and list your various categories of expenses.  It has some line items already completed but it was made before things like internet.  There is space to add your own line items. 

If you have your taxes prepared, you will be charged for the preparation of this form.

So filling out a schedule C isn't the same thing as itemizing?  I learn something new every day!  

Schedule A is where your personal itemized deductions are listed.  Schedule C is for business income and expenses.

Want to complicate it a little more?  Schedule E is most for rental income and expenses.  Schedule F is for farm income and expenses. 

The IRS has tons of forms.  More than you care to know about.  I know about many of them because I am a retired Internal Revenue Agent.  Notice I said retired.  I do work a seasonal tax position but I no longer prepare tax returns. 

[TheOtherMe]

I don't think I've ever had a W-2 position without a probationary period either.  It didn't really matter because the state I live in now and my previous state were both at will.  They could fire people whenever and they do. 

[joemilitary]

Thanks all for the feedback

It's been crazy at work, working 12 - 14 hour days.

Any other feedback is welcome

I'll write more if I have time

My wife's resume also got referred for a government job, so cross your fingers please (although getting referred doesn't necessarily mean she gets an interview, etc....)

[Pants]

[zibazinski]

What is that?

[Tennesseer]

Aug 17, 2015 8:54:28 GMT -5 zibazinski said:

What is that?

An octopus too darn lazy to swim.

[zibazinski]

[Pants]

Aug 17, 2015 8:54:28 GMT -5 zibazinski said:

What is that?

That is the "nope" octopus. 

[joemilitary]

Still been very busy.....wife hasn't heard back from independent contractor job.....leaving that alone until she hears back from them......... but has an interview for a government job in her field with VA tomorrow.....telephone interview....wish her luck

[Anne_in_VA]

That is strange.  I'd guess that they realized your wife wasn't dumb enough to fall for their "dog and pony" show and decided not to keep pursuing her.  

I hope one the new job interview goes better than the first one.

[NomoreDramaQ1015]

wife hasn't heard back from independent contractor job.....leaving that alone until she hears back from them

Sounds like a plan.  Honestly I'd scratch them off the list completely, it sounds like at the least a very disorganized company to work for.  At worst they are lying to people hoping to lure in unsuspecting prospective employees.

Focus on the government job instead.  It will probably end up being a much better fit.

[swamp]

Keep in mind that I don't know jack shit about labor law.

However, I think that an employer can't just decide that an "employee" is a 1099 contractor. If they meet certain criteria, you're an employee no matter what the company calls you.

Run away.

[The Captain]

This is very timely.  IRS issued a fact sheet on this topic a few days ago:

www.irs.gov/uac/Newsroom/Payments-to-Independent-Contractors

I'm pretty much in agreement with everyone that says run away!

[Deleted]

My last workers comp audit seemed much stricter in terms of IC as well. If the IC had no employees the amount of paperwork needed was significant.

[TheOtherMe]

In my years as an Internal Revenue Agent, I have reclassified many independent contractors to employees.

This job is an employee if I were to audit it.  Run as fast as she can.

[marvholly]

Aug 21, 2015 14:50:11 GMT -5 TheOtherMe said:

In my years as an Internal Revenue Agent, I have reclassified many independent contractors to employees.

This job is an employee if I were to audit it.  Run as fast as she can.

Basically the same thing I said about IC vs. employee a couple pages ago AND I NEVER worked in/for HR, IRS, law or accounting.  Just my experience w/late DH being in sales.

[joemilitary]

well no more news

wife hasn't received any word back from the company reference the independent contractor job....so we are in a wait and see mode........  but honestly we are hoping not to hear back.....

in the meantime wife is applying to more jobs as she sees them, also her social worker license finally got transferred to SC (has to be updated to new state for each state we are assigned too)

[zibazinski]

In this case, no news is good news. This has scam written all over it.

[NomoreDramaQ1015]

Agree with zib.  Count it as a blessing.  It means your wife was too smart for them.  She was asking too many questions. They probably feared she'd blow the whistle on them to the DOL and IRS.

[taz157]

Yeah that to both Zib and Drama!

[joemilitary]

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!

[Blonde Granny]

<woot>

[dannylion]

Yay! Great news!