Can you legally pay a regular employee as an independent contractor? 1099 question?

Question

I am a regular employee that pays all of my taxes...ALL of 'em.
I have a boss.
He finds the jobs.
He bids the jobs.
He makes the calls on how to build stuff (I am a marine carpenter).
He pays me, and has done so steadily for two years.
I have to have liability insurance.
If I get injured, I think I'm screwed...I have no personal insurance.
How good of a deal is he getting by paying me as an independent contractor?
And again, is this legal?

Answer 1

he's saving on Social Security, medicare, federal taxes, state taxes, and biggest, and most importantly, insurance, both liability, and workers comp.

It's legal, if you can honestly be described as an independent contractor.


to check up on this, visit the posted website I'm included, and try to determine if you're an employee or a contractor.


http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Answer 2

Employee 1099

Answer 3

This Site Might Help You.

RE:
Can you legally pay a regular employee as an independent contractor? 1099 question?
I am a regular employee that pays all of my taxes...ALL of 'em.
I have a boss.
He finds the jobs.
He bids the jobs.
He makes the calls on how to build stuff (I am a marine carpenter).
He pays me, and has done so steadily for two years.
I have to have liability insurance.
If I get...

Answer 4

With the facts you have provided, it sounds like you do work for a Contractor and are paid as an Independent Contractor. Although you might not be happy with the situation, there isn't anything illegal about it. It is completely to the advantage of this individual to have you work as an independent contractor. If you are in his employ there are a whole host of laws that he has to comply with including but not limited to paying social security, workers compensation and unemployment taxes. As you mentioned, since he isn't paying employee-related taxes, so you aren't eligible for tax-based programs such as workers comp. if you are injured on the job. However, you a few options: Tell this man that you want "employee" status. He will probably tell you that in order to do that he would have to pay you less. You could keep your status as an independent contractor at your current rate of pay but purchase individual disability insurance so you will receive finanical benefits in the event of an illness or job or non-job related injury; Or, Obtain employment with a company that provides full benefits.

Answer 5

No, a regular employee can't be paid as an independent contractor. But from your description of your situation, it's not clear which you are. OK, he finds the jobs and sets the rules on how to build the items. But are you paid hourly, or by the total job? Does he set your hours, or do you as long as you meet the deadlines? If you are paid hourly, and he sets your daily workhours, maybe says that you must work 8-5, you're an employee, othewise you are probably correctly classified as an independent contractor.

Answer 6

It may depend on the state you live in. Generally, an independent contractor should (1) own or provide his own specialized tools, general professional tools, (2) can use payers computers etc, and still be contractor status. (3) should follow normal business custom, so if other businesses of the same type pay contract, then it would be OK for your boss to pay contract. I hope you have been making estimated federal tax payments. Go to IRS.gov. :)

Answer 7

sorry given the info stated ur ARE a Sub Contractor and should receive a 1099 form not W-2.
if u receive a W-2, u and he have IRS problems.
Agin u are not an employee.

Answer 8

Simple answer is No. From what I read before me, the answers get better as they go down. Judy has factual and valid points. I'm a business owner of 17 years and have came across this topic time and again. There are definately securities for an employee to be paid so. You need to do the math to determine what you need or want to make as an independent to make it worth-while. From your "tone" it sounds as if your employer is on the receiving end.

Answer 9

I am in Ohio and own my own bulldozing equipment. 2 years ago I was hired by a landowner to build a farm pond for him. The landowner picked where he wanted the pond, the landowner laid the pond out with flags as to where he wanted the pond. There was no written contract and I was paid an hourly rate and the landowner visited the pond site almost everyday. A few months later, the road started slipping and dropped in the middle. It did not slide into the pond It simply dropped in the middle. The pond was built alongside the road and was on the downhill side of the road on a hillside. The county engineers have sued the landowner for liability and both the land owner and myself for amount of responsibility. I have heard that since I was hired and paid hourly that I am not liable for damages. Can you help me, any information would be appreciated.