Is this even legal?

Is it legal, probably, you don’t mention what state you live in but I know it would be here in Texas.

With them putting you on a 1099, you’re essentially self employed now and will be paying additional taxes at the end of the year that your employer paid previously with you as an employee. So beyond the initial slight pay cut, for more hours, it sounds like you’ll actually make considerably less when you figure in the taxes. They’re probably hoping you don’t know this and will be happy to “take home more each month”...

I hate assuming people are being sinister, but it really appears in this case they’re hoping you don’t know what you’re getting into. If you’re in a bad spot financially, maybe just keep quiet and spend any free time you have looking for a better place.

If you’re interested in staying with the company at all you should probably talk to whoever did this and let them know it’s not going to fly.

If you stay for any amount of time, remember to put at least 25% of your check aside for taxes, keep track of receipts for gas to and from work, track mileage and any expenses related to work. As an example if you dress up for work, those clothes are now a business expense. Those expenses can reduce your income that will be taxed. Consider sitting down with an accountant for an hour or so now and it will probably save you more than the costs come tax time.

Good luck and let us know how it turns out.

Question: “everyone” meaning who, some unit or group? You still have bosses (more than one), so it’s not the whole company. The picture is not clear. How many people are you replacing?

Not that it’s a factor in legality, but I am curious about what kind of work you do.

No, probably not legal. Since you do not have the money you need to talk to an attorney, contact your local EEOC for help. Here is the website for the EEOC – and you can find the link to your field office: link

There are laws and guidelines – they can’t tell you to move in, they can’t tell you that you must work until 1am. They are bullying you and yes, trying to get you to quit.

I live in PA – by everyone I mean all except the two owners my manager and me. The rest are family members that work in shipping. I am the only person from the outside that works here. They dont want me to move in but basically give up my life. I hate this ALOT and i feel trapped – I dont think its right, but I need a job. I am worried about the 1099 thing as well i will be sure to talk to them about this as it starts Monday. I knew there was more to the 1099 thing then i realized. How much should I ask for to keep my same income that I had pre-1099 and still have the extra for taxes. I doubt they will give me it

Congratulations! Now that you’re a 1099, you’re an independent contractor! Here is some information on being an independent contractor. From what you’ve said it sounds like you aren’t really one, but they are trying to classify you as such. If that’s true, and you’d need to weigh this long and hard in your mind, you can fill out a form which basically cries to the IRS that they are unfairly categorizing you as a contractor instead of an employee. The IRS makes a decision. Then you can file that you were misclassified as a contractor and make your company pay their part of your taxes.

But I would hold this all as a last resort because it seems like a great way to lose your job and honestly, I’m not a lawyer or accountant, I just got all of this from reading the IRS website.

It doesn’t sound legal to me at all.

I have nothing to add, except your bosses suck balls. Good luck whichever option you choose.

Out of TOPIC: This world is getting into a big mess.What a terrible time to graduate just rambling about my frustation

Disclaimer: no legal knowledge, not an HR person, not a businessperson. You do need knowledgeable advice. Personal opinion follows.

It sounds to me like a frantic response to economic pressures of the sort that are suddenly killing off or crippling businesses large and small all around us. This is a very small operation, and they are trying to keep the business going with the least possible expense. If you become a contractor rather than an employee, they don’t owe you benefits like health care, sick pay, holidays, etc., never mind retirement or any of those other things that employees expect and that are very expensive to companies. You are on your own.

Right now it sounds like a terrible deal for you, and you definitely have to find out what this means and what your rights are. But I suggest that you talk to them and ask them to lay it out for you. If you are one of only five people and that is the whole company, you can’t be the only one in the dark. Is this the only way they can see the company surviving? Are you crucial to that? If it folds, you all lose your income. Do they have other options? Can they find someone else to do what they are asking of you? Do you have other options? How readily can you get another job? There should be a frank discussion with real facts, not one-sided and partial information.

At my house, where there have been some very lean times in the past, we say, “Some dollars is better than no dollars.” No one should agree to be exploited by some illegal scheme. But if a short-term sacrifice is needed to keep the business alive, and your loyalty is going to be rewarded, maybe you will want to negotiate. This would be a really good time to have a cousin who understands labor laws.

ALSO: as an independent contractor, you usually pay taxes quarterly. The next tax time isn’t until the end of the year, but check out the IRS website and read up on it. If you miss one, you have to pay a late fee (interest, really). While the fee isn’t much, you’d rather keep that money in your pocket, right?

Find out if you can collect unemployment. It might be possible since they are changing the terms of your job.

Its def to save the company they are not doing well with the economy so 1099 cuts out payroll

You should check out that IRS site. Under type of relationship the last two items indicate that you should be in an employer/employee relationship. I imagine all of behavioral control points that way as well. Again, financial control points to the same thing.

They can’t tell you to work 55 hours a week, as an hourly employee, without paying you overtime (time and a half) for all the hours over 40 per week.

Once you are an independent contractor, you are your own boss, and the company is your client. You can negotiate whatever deal you can get, and you decide how to do the work. Of course, they are expecting to own you like a slave anyway.

There may be a problem. The IRS doesn’t allow companies to force folks to be independent contractors, when they normally would be hourly employees. They know it’s a cost saving move for the company to get out of paying benefits.

Since you were an hourly, it seems like this is clearly what is happening. They could get into tax trouble…. if you report them. Of course, if you report them, you lose your job, too.

I don’t know what the job is. I don’t know your circumstances. I would advise you, that if it is possible, you should get another job, unless you have a chance at stock options or big money when the product hits the shelves if you stick with this company.

Work is generally at will. They can tell you that they need you to work 55 hours a week, they can tell you what they will pay you to do so. You can accept or refuse, that’s how it is in most states.

However, in many states (and check with your state), you can quite for cause and still get unemployment benefits. For example in Minnesota, from the Department of Employment and Economic Development,

“Minnesoat Statutes, Section 268.095, Subdivision 1, provides that an applicatn who quit employment is ineligible for all unemployment benefits except when the applicant quit the employment because of a good reason caused by the employer. Subdivision 3, provides that a good reason caused by the employer for quitting is a reason that is directly related to the employment and for which the employer is responsible; that is adverse to the woker; and that would compel an average, reasonable worker to quit and become unemployed rather than remaining in the employment.”

Now, as I see it, they have eliminated your hourly position. If your state has anything like this, it should be a slam dunk. And consider this, they obviously need you, if not you would have been on the layoff list. You have leverage. If I were you, I’d ensure that your state has a similar quit for cause statute (though I honestly don’t think you’ll have to quit), and I would say to my employer that I wished to remain employed at an hourly rate of pay, I do not wish to become self employed, and if I am to become self employed, then you will need to double my hourly rate of pay and pay me for every hour I work, as that is my contract rate. At that point, they could terminate you, but then you’d have been terminated through no performance related issue.

Basically, tell them that you consider their request to be notification that your hourly position has been eliminated, and that if they would like to hire you as an independent contractor, you can negotiate the terms with them, however because you will have to pay for all your own benefits, taxes (FICA will double), etc., you are not willing to do the same job for less pay.

They are trying to take advantage of you not knowing your rights. They CAN do whatever they want, but you DON’T have to accept it.

EmpressPixie is right. If you are being paid via 1099, then you are being treated as a contractor and as such you can decide what hours you work, when and where. You are no longer an employee of your awful boss/company.
Did you sign a contract?
If you have not signed a contract agreeing to your employers conditions and he is still directing your work, then you are an employee and it is likely illegal for him to pay you via 1099. As an employee, you would be subject to the wage and hour laws of your state and your employer cannot violate those laws.
You should contact your state’s Bureau of Labor and Industries and get some clarification on what you can or cannot do in this instance.
You should protect yourself from being abused by a bully of a boss, too.

This just sucks. Good luck, and please let us know how it turns out.

I know it’s legal to hold up a card board sign. Life’s choices suck sometimes!

i would call the IRS first, to find out what your rights are. i would also call unemployment (excuse me, the state department of labor) and i would talk to the job, and be prepared to lose the job (it doesn’t sound too appealing, anyway, to have to stay till 1 in the morning and have no life – they would only do that to someone who they thought would be naive enough to take it).

you’ll have your answers from the IRS and the Dept of Labor so you will have more leverage when you talk to the job.

this crap is why unions can be beneficial (and yes, folks, i know unions can also be not so good for certain types of people).

When you bring your dog to work, make sure he’s armed. That way you can blame the dog when everything goes postal.

yeah I’m not under any contract – maybe a verbal agreement if that’s counts? I’m looking for another job and I’ll try this out on Monday and Tuesday and if I think it’s to much I’m just gonna tell them what’s up and to either pay me for my time or put me back to 8 hr days. Thanks for everyones help I’m gonna look into the webspages and suggestions you all have.

write and tell us how it works out.

Your after tax pay will be slightly less but now you get to write off a whole slew of expenses too. Done correctly with a few deduction rules bent your actual realized after tax dollars income could be greater. You should be able to write off car expenses, mileage, meals, throw in a new laptop, big screen TV, MP3 player, work clothes wardrobe, don’t stop there! It’s how the rich people do it!