1099 and W2

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1099 and W2

An employee wants to switch back and forth between being an employee and being a subcontractor. As far as documenting when those start and end dates occur and the scope of control when determining a 1099 from an employee, I’m clear on. What concerns me is he’s clearly trying to game the system in terms of some deductions of his. Of course, doing this wouldn’t excuse him from making those payments and I’m sure he’s aware of it to some extent, but as far as the company’s liability in all this, would his almost assured delinquency become our problem as well?

Asked on March 26, 2018 under Employment Labor Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

The employee can't switch back and forth at his/her choice for two reasons, so if uncomfortable with this, don't allow it.
1) First, remember, employment is "employment at will": the employer, not the employee, controls the terms of the job. The employer can say "this is an employee position" or "this is an independent contractor position" and only employ someone as the one or the other.
2) Whether someone is an employee or independent contractor depends on how they work, not what they--or the employer--want to call them. If the employer controls how they work (not just what they must do, but can direct or manage how they do it) and where and when the work must be done, the person is an employee, no matter what the worker or employer wants to call him. If the worker could work on his/her own hours, mostly at whatever location he/she wants, and the employer doesn't tell him how to do his/her job, he could be an independent contractor because he/she meets the criteria for independent contractor (he/she could also be an employee, if the *employer*--remember: employment at will--wants him/her to be).
Example: I used to work in the book publishing industry. The graphic artists who worked mostly on site, during regular business hours, who were subject to be being instructed, managed, etc. by the art director, were employees. A graphic artist who worked offsite, at his/her own home on his/her own hours, and who was given a task (e.g. design a book cover) and who turned in work product for review and approval without a manager looking over his/her shoulder, that was an independent contractor.


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