How long can a company hold my paycheck if I work as a 1099 contractor?

Asked on July 31, 2010 under Employment Labor Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

First, just to clarify: if you are validly receiving a 1099--i.e. you really should be receiving one--you are not an employee and are not receiving a "paycheck". Instead, you are an indendent contractor or vendor.

This is an important consideration because while there are laws that govern when companies  need to provide paychecks, there are no laws about how long they have to pay independent contractors. Instead, how long they have will be governed first and foremost by the terms of agreement with them (the agreement subject to which you provide services), including as reflected on any invoices you send them. For example, invoices will usually specific how long to pay; e.g. "net 30." If there are no payment terms, then the argument would be that there was an implicit agreement that you would be paid according to the normal practice in the industry for work like that which you did. In other words, if normally your sort of services are paid in 30 days, the argument you'd advance is that it was implicit in the service or contractor agreement that you'd be paid in line with the normal and accepted payment terms, net 30.

Independent contractors and their compensation are governed by contract; ergo, if you feel that the company is breaching the contract, including oral contract, under which you provided service, such as by not paying, you would need to sue them to enforce the agreement and be paid; the dept. of labor will not help or intervene, as they do in some instances involving actual employees.

Depending on what you did for this company and the circumstances under which you worked, you may, however, actually be an employee, which could potentially make you eligible for overtime and give you some other protections. It doesn't matter what the company called you--what matters is whether the nature of the work you did for/with them and your relationship to the company makes you an employee. You can go to the Dept. of Labor website; there should be some information there on when someone is an independent contractor (1099) or employee.


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