I work for a company that considers me to be contract labor?

Question

and i am having trouble getting paid on time. is there anything i can do? also i don't agree that i should be contract labor, i don't feel that i meet the requirements, is there anything i can do about that.

i am already looking for another job, but i'm wondering what i can do in the mean time. please and thank you.

Answer 1

Hi Lee.  

I'm not sure where you are from, but I'm sure they have similar laws to where I'm from regarding contractors.

I agree with Angela about the article ref.  However, I'd be inclined to go a step further an report them (anonymously of course) to your tax authority.  

As for getting paid on time, if they insist on treating you as a contractor, then you need to be submitting invoices.  I'd say at the close of every week, with 7-days payment terms clearly printed on them.  Once it's documented, they still have to pay you if you leave.

I had a very similar situation years ago: working for this idiot landscaper who was insistant on paying me as sub-contract, because his accountant told him it was a good idea.  Not such a good idea for me:  I was about to miss out on all sorts of employee entitlements because ot it.  

Luckily, I had a friend who worked in the ATO (my local tax authority) who I got to ring me at work one day.  I started talking on the phone about it, and he tried butting in, so he eventually got on the phone to my friend who got tell him what his legal obligations under the tax was.  He didn't like that.  But I got paid properly.  Needless to say, I wasn't with him for too much longer after that.  Good riddance to bad rubbish I say!

Nowadays I work as an accountant in public practice, and I get to counsel my clients on what their correct obligations are.

It might be okay to be contractor, but the cost will be the same if not a bit more to the business.  You have to cover taxes, insurances, and you need to be compensated for all the entitlements you'll miss out on.  My experience is that business owners just want to use it as means to pay less money for the same service.

However, you're right: you are better off out of there.  The danger is that this firm could be experiencing cash flow problems, and wants to use you as a source of informal trade finance.

You mention you're looking for another job already, and that's a good positive step.  If it's any help, I recently saw the Interview Skills Blog.  Seems to have good general info on brushing up on your interview and questions skills.

Good luck.

Answer 2

Here's a link to an IRS article that explains the difference in an employee and an independent contractor.  http://www.irs.gov/businesses/small/arti...  Once you read it, if you still feel that you don't meet the qualifications of an independent contractor then you might want to print the article and show it to your employer.  As far as getting paid, a lot of companies take 30 days to pay so just keep after them.  I also hope you realize that as an independent contractor you are required to pay your own taxes.  When you file next April you will need to fill out a Sch. C and a Sch. SE.  You can deduct any job related expenses on the Sch. C.  The SE is 15.3% of 92.35% of your net on the Sch. C so be prepared.  If you make very much at this job you should make an estimated payment to the IRS.  Here's a link to information on paying estimated payments, including payment vouchers and the dates they are due.  http://www.irs.gov/businesses/small/arti...