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Who do I cal to report a massage heights that is breaking labor laws in Texas. They offer to pay therapist as independent contractors but require everyone to wear uniforms and to come in and leave at predetermined times. In fact everyone has to get the managers approval to leave early even if they are an independent contractor. I didn't take them up on this because I knew they were doing this to avoid paying social security and medicare.
For 1099 abuse the workers should file IRS form SS-8 for a determination as to if employment meets the criteria for declaring them 1099. Most often it dooes not and there have been several threads on this topic. Search this forum for ss-8.
Making you wear a uniform and maintain set hours does not make their operation illegal.
Your state has some kind of wage and labor board.
My understanding is the making someone wear a uniform makes that person an employee not an independent contractor. I am not 100% sure about the set hours but people were forced to stay whether they were working or not, which I believe is also something that makes someone an employee.
This is the list the IRS scrutinizes to test whether the position/worker needs to be w-2 vs ss-8. If the answer to more than a few is Yes than it is W-2. I the vast majority of cases they rule w-2. There is a good reason for this. Suddenly no company would have employees only independent contractors and there would be no workers comp or unemployment compensation.
A worker is an employee if the worker:
1. Must comply with the employer’s instructions
2. Receives employer sponsored training
3. Provides services that are an integral part of the business
4. Renders services personally
5. Hires, supervises, and pays assistants for the employer
6. Has a continuing relationship with the employer
7. Must follow set hours of work
8. Works full time for the employer
9. Works on the employer’s premises
10. Performs tasks in an order of sequence set by the employer
11. Must submit oral or written reports
12. Is paid by hour, week, month
13. Is paid for business and/or travelling expenses
14. Is furnished with tools and materials
15. Does not have a significant investment in the service-providing facilities
16. Cannot realize a profit or loss
17. Works for only one employer at a time
18. Does not make services available to the general public
19. Can be fired, and
20. May quit without incurring liability to the employer.
Although there have been many noted cases about missclassification of employees as independent contractors, there is probably an equal number of independent contractors who were said they were employees based on the IRS testing and turned out to still be independent contractors. When reading the various "test" you can use to determine if an employee or IC, note how the results are always a "may be" not "you are". This is because there are many scenarios where an IC may look and act like an employee but are still ruled an IC.
Before wasting time and possible getting blacklisted as a trouble maker, find a qualified legal adviser to give you a quick review and explain if they think you would have been missclassified or if under your scenario/industry it's been accepted that certain work related operations still kept you as an IC even though it appears to cross some of the employee testing rules. Also, don't forget you have little clout in this (who you can complain to or even fill out a IRS SS8 ) as you never accepted the position so you really have no idea exactly how it operates and never operated under those conditions for anyone to make a factual determination.
Making you wear a uniform and maintain set hours does not make their operation illegal.
Your state has some kind of wage and labor board.
I'm not sure about Texas, but here in Wisconsin, setting someone's hours makes them an employee. Employers don't get to make someone an "independent contractor" just because it's more convenient.
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