Are the "temps" also treated contractors? Cause under Federal law the IRS can come down like a ton of bricks on a business that classifies someone who essentially "acts" as an employee as a contractor to avoid withholding, paying payroll taxes, etc.
"For federal tax purposes the usual common law rules are applicable to determine whether a worker is an independent contractor or an employee. Under the common law, you must examine the relationship between the worker and the business. All evidence of the degree of control and independence in this relationship should be considered. The facts that provide this evidence fall into three categories – Behavioral Control, Financial Control, and the Type of Relationship of the parties..." More at http://www.irs.gov/taxtopics/tc762.html including links to somewhat clarifying forms. It could also be a violation of the Federal Fair Labor Standards Act. Here's what the Small Business Administration says: ++++++++++++++++++++++ Why Does It Matter? Misclassification of an individual as an independent contractor may have a number of costly legal consequences. If your independent contractor is discovered to meet the legal definition of an employee, you may be required to: • Reimburse them for wages you should've paid them under the Fair Labor Standards Act, including overtime and minimum wage • Pay back taxes and penalties for federal and state income taxes, Social Security, Medicare and unemployment • Pay any misclassified injured employees workers' compensation benefits • Provide employee benefits, including health insurance, retirement, etc. Tax Requirements Visit the IRS Independent Contractor or Employee guide to learn about the tax implications of either scenario, download and fill out a form to have the IRS officially determine your workers’ status, and find other related resources. Employment Information There is no single test for determining if an individual is an independent contractor or an employee under the Fair Labor Standards Act. However, the following guidelines should be taken into account: • The extent to which the services rendered are an integral part of the principal's business • The permanency of the relationship • The amount of the alleged contractor's investment in facilities and equipment • The nature and degree of control by the principal • The alleged contractor's opportunities for profit and loss • The amount of initiative, judgment, or foresight in open market competition with others that is required for the success of the claimed independent contractor • The degree of independent business organization and operation Whether a person is an independent contractor or an employee generally depends on the amount of control exercised by the employer over the work being done. http://www.sba.gov/content/hire-contractor-or-employee +++++++++++++++++++++++++ That's separate from California statute and case law, of course. Long ago I got screwed this way by an employer, called a contractor when I was quite clearly treated as an employee for everything. I've been aware of the Federal distinction ever since. Arthur Gaer On Dec 10, 2012, at 1:43 PM, Moose Finklestein wrote: > On Mon, Dec 10, 2012 at 12:19 PM, drich <[email protected]> wrote: >> I have heard this before, but no one has ever provided a citation. Do you >> know *where* it is stated to be illegal under Ca. law? > > > Dr Google says that the rights of "permatemps" is not completely clear > *but* that there have been lawsuits from groups who were clearly hired > as "temps" but required to work as full employees (ie. doing the same > job as "regular" employees), while being denied the benefits of a full > employee. > > See: > http://www.lawyersandsettlements.com/articles/california_labor_law/california-labor-law-state-13-11855.html?utm_expid=3607522-0 > which sadly does not reference any actual case law. And they were > for municipal jobs, which is a whole other ball of disaster, no pun > intended, which may not be applicable to folks working for > corporations. > > Most of the law I can find about temporary employees in .ca.us is > about how they must be paid. > > I Am Not A Lawyer. But I play one in my Pree-Sk00l Lawyerz Office Playset. > _______________________________________________ > Discuss mailing list > [email protected] > https://lists.lopsa.org/cgi-bin/mailman/listinfo/discuss > This list provided by the League of Professional System Administrators > http://lopsa.org/ _______________________________________________ Discuss mailing list [email protected] https://lists.lopsa.org/cgi-bin/mailman/listinfo/discuss This list provided by the League of Professional System Administrators http://lopsa.org/
