Thanks very much Todd, Bob, Arthur, Brian for the advice. Let me first
mention that I do have a good attorney. I have a meeting scheduled with him
next week. What I am looking to the list for, has anyone exerienced this or
know of any information resouces that I can look to, in the meantime. I do
not intend to represent myself in this case. It would just help a great
deal if I knew what I am up against.
Thanks again,
Julie
----- Original Message -----
From: Bob Carper <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Saturday, May 20, 2000 5:00 AM
Subject: Re: Contractor vs. Employee
> Julie:
>
> My first bit of advice to you which overrides everything else I will say
> about this matter is this: Get a competent attorney who is skilled in
> employer - employee contracts. Do not attempt to practice law yourself
> and take whatever advice you receive (including mine) with a big grain
> of salt. Even thjough all of us contractors have been involved in some
> aspect or other of the issues regarding contractor versus permanent
> employee status, we are all amateurs as far as the legality issues are
> concerned. If you attempt to practice law yourself, you can get burned.
> Big time, too.
>
> Now with that disclaimer out of the way, here is my opinion as an
> amateur on the subject.
>
> When this lady first came on board, one of the first issues would be
> regarding employment status. This would be an either or case. Either
> you set up remuneration on a 1099 basis for her, or else you set her up
> as your employee on a W2 Basis. If it is on a 1099, all your agreement
> can say is that you are engaging this person on a subcontract basis,
> with the prime contract being between you and your client, and the
> subcontract being between you and this lady. No contractual
> relationship should exist directly between your client and this lady you
> have engaged. You are not obligated to pay unemployment insurance,
> employer social security contribution, or workman's comp. The matter of
> temp to perm thus becomes a clause which merely states that the client
> has the right to negotiate with your contracted person at some time in
> the future. Should you end this contract with your contracted person,
> this person could file for unemployment if she wishes, but you would not
> be the last employer of record. The last organization that used her
> services on a W2 basis would. Quite possibly, this person would never
> be entitled to receive any unemployment compensation because she worked
> beyond any period in which any employer would be responsible. Thus, the
> 1099 has some salvation for your organization in that it removes you
> from any unemployment regulation.
>
> Now, if you chose to EMPLOY her and negotiated an Agreement to that
> effect, you would be responsible for witholding all appropriate taxes,
> maintaining unemployment compensation contributions, and all over
> overhead that comes with an employee except involving her in your fringe
> benefits package. If you terminate her employment, the reasons for such
> termination must be between you and her, not between her and your
> client. If she has done such things as falsify timesheets, falsify
> expense reporting forms for which you reimburse her, or act in an
> insubordiate manner to you as her employer, you can terminate her for
> cause and this will deny her any unemployment benefits. If, however,
> your client asks you to remove her because things have not worked out,
> she is still your employee. All that's happened is that your client
> does not want her around. It thus remains for you to examine your
> current available job openings and see if there is anything else you can
> send her out on. If there isn't anything else, you can terminate her
> for lack of work, which begins on the day your client suspended her
> contract. She then has the right to file for unemployment on the day
> her income became suspended. Unfortunately, your unemployment
> compensation liabilities thus kick in. All you can do is hope and pray
> she finds other work as quickly as possible.
>
> The temp to perm stuff thus becomes irrelevant. That only becomes a
> factor when the time comes for you to engage with your client in
> negotiations to allow her to become a perm employee of your client.
>
> I hope this helps ........but remember, this is not legal advice, and
> should be taken as only an opinion. I will now get off my legal soap
> box and return to getting some EDI mapping done......
>
> Cheers
> Bob Carper
>
> > Julie Ballantine wrote:
> >
> > I need your help. I have been contacted by the Employment Development
> > Department. They are auditing my company in about 3 months. Here is
> > the situation:
> >
> > My company provides consulting, contract-to-hire, and direct placement
> > services to companies in need of EDI or EC related consultants.
> >
> > We sent a consultant (1099), name not mentioned, let's just call her
> > Graceful, to a company on a "contract to hire" basis. This consultant
> > signed a contract that clearly stated she was an independant
> > contractor, and not an emplyee. After 3 months, if the company liked
> > her, they were going to hire her. The problem was she did not perform
> > her job functions, as she indicated she could during the screening
> > process, and I had to let her go - at the request of the client.
> > Then, she submitted a request for Unemployment insurance at the EDD.
> >
> > Her benefits were in question because my company responded back
> > stating that her contract clearly stated she was an independant
> > contractor, not an employee. We sent EDD a copy of the contract.
> > This caused the contractor to call EDD and state that she "didn't
> > understand her hiring terms and thought she was an employee". How
> > many of us DONT read our contracts???? Her confusion caused the EDD
> > to investigate and ultimatly classify her as being an employee of my
> > company. They determined this because of the terms of the work
> > environment: on-site, at "my clients" office. I can understand that
> > this type of contractor would be classified as a "employee". An
> > independant contractor works when they want and where they want. I
> > can agree with the contract to hires as beign classified as W2.
> > Fine.
> >
> > Now, the EDD is auditing us to make sure we dont have any other
> > "misclassifications".
> >
> > The big question I have here is this. I have other "independant
> > contractors" that work out of their offices, on their own time,
> > receive other income, and work with their own equipment that I do not
> > provide. I had explained circumstances, and the EDD stated that
> > because they are doing work for my client and I am paying the
> > "consultants", they are classified as W2 employees also. I disagree
> > with this. What are your feelings on this? Do you know of any
> > resources that can help me prove the "Independant contracotr" vs. the
> > "Employee"? Has anyone else gone through this - win or loose? I am
> > going to fight this until the end.
> >
> > Thanks for your input on this.
> >
> > Julie
> >
>
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