Whatt o do if I was a 1099 employee this summer but the company is withholding money from me even though the work was done?

UPDATED: Mar 29, 2012

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Whatt o do if I was a 1099 employee this summer but the company is withholding money from me even though the work was done?

I installed alarm systems over the summer. The company I worked for holds a percentage of each job to be paid on Nov1 and March1. On March1 I received a decent amount less than I was expecting. I emailed the company but did not receive an answer for almost a month. The money was withheld due to accounts canceling, which were set up by sales reps, not by me. They withhold money from the reps for this exact reason, yet they took my money as well, even though the work was still done. Can I take this to small claims? What repercussions might there be if I lose?

Asked on March 29, 2012 under Employment Labor Law, Utah


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

A contractor (which is what a "1099 employee is"--an independent contractor) must be paid as per the agreement under which he/she provided service or did work, so if you were to be paid a certain hourly rate, or rate per customer, installation, or project, you should have been paid that. Your employer may only debit the amounts due you for canceled accounts if the agreement between you had provided that.

You may take this matter to small claims (assuming the sum(s) involved are less than the jurisdictional limit for small claims); it would presumbably be a breach of contract claim-the employer's violation of the agreement pursuant to which you did the work.

As long as you do not 1) publically defame the employer (do not make untrue factual assertions about them which damages their reputation) and 2) have a good faith basis for bringing the law suit, there should be no repurcussions for bringing it, even if you lose.

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