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I'll guess this has been asked on this board before, sorry in advance for my not finding it on a quick search.

My twenty year old son works at a sports complex. The owner leased a huge amount of space in warehouse. Then laid down some astro turf for soccer fields, built a full court basketball court, installed a weight room, a batting cage, and so on. The facility is popular and heavily used. I know the owner as she once coached at the high school for my daughter's field hockey team. She was kind enough to hire my son.

My son works hours that are scheduled by the manager of the complex. His duties are either at the front desk or as the commissioner who organizes sports leagues. He is paid an hourly wage and records his hours after each shift. I've never looked at his paystubs but have just now received a 1099 vs. a W2. It appears as the owner is classifying him as a self employed individual. I'm not really happy with this. Not looking forward to doing his taxes and having to pay both sides of Soc. Security. His income from 2012 was about $6,000. so not a heavy tax hit, and I'll guess I'll soon learn thru TurboTax how to minimize thru deductions any tax liabilty. No taxes were withheld for federal, state, or county. Overall I'm not comfortable with how he is classified at his employment, but I'm happy he has a job he enjoys. Do I talk to the owner? Is this legal?
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Overall I'm not comfortable with how he is classified at his employment, but I'm happy he has a job he enjoys. Do I talk to the owner? Is this legal?

From the information you provided it appears that he should have been treated as an employee, not an independent contractor. There's no bright line. Instead there are 20 common law questions that, when taken as a whole, should give a pretty clear picture. Form SS-8 has those questions.

Lesson for your son. When you start working at a new job you should be asked for some tax paperwork. An employer will want a W-4, which is used to determine income tax withholding. If you're working as an independent contractor they should want a W-9, on which you certify your SSN and say that you're not subject to backup withholding. Your first paystub will also tell you since it will account for any withholding. It astounds me that so few people are the least bit curious as to what's on their paystubs. Get in the habit of always examining your paystub. Problems are much easier to correct when promptly addressed.

Let's assume that your son has been misclassified. What to do, what to do? For starters, if he's old enough to be working he's old enough to talk to the boss himself rather than having you do so. I always start with the assumption that I'm dealing with a person of good will who has made an honest mistake. You can always progress to calling someone a crook, but it's really hard to backtrack if you find out you've done so in error.

The boss's response will dictate the options that follow.

Phil
Rule Your Retirement Home Fool
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If his hours are being scheduled by a Manager, then what you've described does not appear to be legal. The Owner (and Manager) are avoiding a lot of extra expense, paperwork and liability by mis-classifying your son.

It would make sense to talk with the Owner (or Manager) about this. They may eventually have to talk with the authorities as well.
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I always start with the assumption that I'm dealing with a person of good will who has made an honest mistake.

You are a better person than I. But, then, long experience in the subject of employers issuing 1099s fraudulently has jaded my view on the subject.

MOI
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You are a better person than I. But, then, long experience ....

Not a better person, just one experienced at cold calling on people who, according to their IRS account record, owed money. I quickly learned that those records weren't always right, so "Our records indicate that you owe..." gave the taxpayer a chance to raise the issue while relations were still cordial. Much easier to get information from people when everyone's playing nice.

Back to OP's situation, I have run into employers who misclassified workers because they didn't know better and quickly fixed things when shown the error of their ways. I've run into more who know full well what they're doing. In either event, it costs OP's son nothing to find out which he's dealing with before proceeding.

Phil
Rule Your Retirement Home Fool
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In addition to what Phil said, depending on the state, if he is an employee, the employer would also be responsible for State Industrial Insurance and unemployments insurance.

If a contract laborer, in WA State the employer would also have to have proof that he had a business license.
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Your son sounds like an employee to me. However, if he ends up being a contractor, set up an individual 401K (Roth?) and stuff all that you can into it!!

Kathleen
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