I work for a company & get paid hourly for 40 hours of work. Thing is, anything over 40, i get paid with cash at regular wage and it's supposed to be under the table. It may sound like a bad deal, but since it was off the books, an employee could accumulate a decent amount of hours (some guys were working 90 hours) and get paid a much larger check than if you got paid time and a half with restricted hours. Come tax time, my boss hits me with a 1099 along with my W2, and so now I have to report the extra income. I know it's my own fault for getting myself involved in this mess, but is what my boss doing legal? Can I sue for time and a half owed to me? Is there any other action I can take?
2007-02-25 06:20:41 · 7 answers · asked by Eddie 2 in Business & Finance ➔ Taxes ➔ United States
What he has done is not legal. You are either an employee or a contractor but not both. He is trying to save his share of the social security tax by making you pay for it. Sorry to tell you but you are probably going to have to quit your job after reporting him.
Don't say that what you did was under the table. Just act innocent like you didn't understand what he was doing until now. You should get the overtime pay.
2007-02-25 06:24:44 · answer #1 · answered by Barkley Hound 7 · 1⤊ 0⤋
Call your state department of labor, or the local office of the federal department of labor (see dol.gov). Assuming you're doing the same job after hours as you are during your normal hours, no, what he's doing is illegal by federal law. If you're an employee at 2 pm, then you're not an independent contractor doing the same job at 7 pm. And you should be getting time and a half for hours over 40 a week.
What he's doing is illegal from several standpoints, both from claiming the same job is an employee and an independent contractor, and in not paying overytime for hours over 40. And yes, if you report this to the authorities, he can be required to pay you the back time and a half pay.
You can request a determination from the IRS over whether you are an employee or an independent contractor. You're not both for the same job.
Yes, you got yourself into this mess by agreeing to it. And while reporting him will get him into trouble, you could end up out of a job.
Good luck.
2007-02-25 06:36:17 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
He is evading taxes and violating the wage and hour rules. Take your case to the State Department of Labor to recover the unpaid overtime (50% of the 1099 amount).
You also will have to come clean and report all of the 1099 income, and when you recover the missing overtime, you will also report that income.
For now, I would file your return using the W-2, and file a Schedule C on the 1099. If you recover the overtime money and get a corrected W-2, file an amended return to pay the extra income tax, and recover the extra self-employment taxes.
2007-02-25 06:33:44 · answer #3 · answered by ninasgramma 7 · 2⤊ 0⤋
No, you're BOTH breaking the law. You cannot be an employee and an independent contractor for the same work for the same "employer". You are both parties to payroll tax fraud and if you don't act immediately to protect yourself you could find yourself on the short end of a very pointy stick.
An employer CANNOT pay you "off the books" for any time worked. Nor can they pay you less than the overtime wage for any overtime work, unless you are an exempt salaried employee.
Demand that they provide you with a proper W2 reflecting your total wages and the proper withholdings. If they comply, they may demand your share of your Social Security and Medicare withholdings; you'll have to negotiate that with them.
I would file a fraud notice with the IRS on this one. I would also file a complaint with the State Labor Board or Wage and Hour Divison on the overtime wage issue.
This one is very brown and very smelly. You know what THAT means.
2007-02-25 06:33:37 · answer #4 · answered by Bostonian In MO 7 · 3⤊ 0⤋
I don't think what your boss is doing is legal. He can't have it both ways - you are either an employee or not. Talk to an accountant and see what they have to say. You may have cause for action against your employer (and you should try to get other employees involved in the case too).
2007-02-25 06:24:18 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Please report your boss to your state's labor commission.
Ask them state laws regarding OT. In Colorado, anything over 12 hours/day or 40 hrs per week is time-1/2, unless you are "sallaried", in which case it's nothing.
If your boss ripped you off, go to him and innocently ask for an explanation, something like, "Gee, I'm confused. I thought that after 40 hours per week I got time and a half?"
2007-02-25 11:28:10 · answer #6 · answered by Just Mee 2 · 0⤊ 0⤋
Go to your local labor board. The company owes you for time and a half. You will have to file a complaint. That is illegal.
2007-02-25 12:57:54 · answer #7 · answered by Jay J 1 · 0⤊ 0⤋