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That may not be legal in many professions and situations. IRS criteria determine if the worker is 1099 or not it is not a choice. Also this owner may not like the lack of control necessary for the worker to be a 1099.
That may not be legal in many professions and situations. IRS criteria determine if the worker is 1099 or not it is not a choice. Also this owner may not like the lack of control necessary for the worker to be a 1099.
That is true some won't deal with it at all, they freak. But on other issues there is just a formality sometimes that requires you file a corporation and that is all you need to do to qualify. You won't even need the 1099, you have your own invoices and payment receipts, so you actually don't need a 1099. It is corporate to corporate work. But you do need an accountant. Plus you need in these cases to file with the IRS that you are a "pass through entity". Small companies under ten people generally like people that come in like that, but you always have just as many that hate it due to a perceived lack of control or other issues.
Internal Revenue Service 20 point Checklist for Independent Contractor
Mistakenly classifying an employee as an independent contractor can result in significant fines
and penalties. There are 20 factors used by the IRS to determine whether you have enough control
over a worker to be an employer. Though these rules are intended only as a guide-the IRS says the
importance of each factor depends on the individual circumstances-they should be helpful in
determining whether you wield enough control to show an employer-employee relationship. If
you answer “Yes” to all of the first four questions, you’re probably dealing with an independent
contractor; “Yes” to any of questions 5 through 20 means your worker is probably an employee.
1. Profit or loss. Can the worker make a profit or suffer a loss as a result of the work, aside from
the money earned from the project? (This should involve real economic risk-not just the risk
of not getting paid.)
2. Investment. Does the worker have an investment in the equipment and facilities used to do
the work? (The greater the investment, the more likely independent contractor status.)
3. Works for more than one firm. Does the person work for more than one company at a time?
(This tends to indicate independent contractor status, but isn’t conclusive since employees can
also work for more than one employer.)
4. Services offered to the general public. Does the worker offer services to the general public?
5. Instructions. Do you have the right to give the worker instructions about when, where, and
how to work? (This shows control over the worker.)
6. Training. Do you train the worker to do the job in a particular way? (Independent contractors
are already trained.)
7. Integration. Are the worker’s services so important to your business that they have become a
necessary part of the business? (This may show that the worker is subject to your control.)
8. Services rendered personally. Must the worker provide the services personally, as opposed
to delegating tasks to someone else? (This indicates that you are interested in the methods
employed, and not just the results.)
9. Hiring assistants. Do you hire, supervise, and pay the worker’s assistants? (Independent
contractors hire and pay their own staff.)
10. Continuing relationship. Is there an ongoing relationship between the worker and yourself?
(A relationship can be considered ongoing if services are performed frequently, but
irregularly.)
11. Work hours. Do you set the worker’s hours? (Independent contractors are masters of their
own time.)
12. Full-time work. Must the worker spend all of his or her time on your job? (Independent
contractors choose when and where they will work.)
13. Work done on premises. Must the individual work on your premises, or do you control the
route or location where the work must be performed? (Answering no doesn’t by itself mean
independent contractor status.)
14. Sequence. Do you have the right to determine the order in which services are performed?
(This shows control over the worker)
15. Reports. Must the worker give you reports accounting for his or her actions? (This may show
lack of independence)
16. Pay Schedules. Do you pay the worker by hour, week, or month? (Independent contractors
are generally paid by the job or commission, although by industry practice, some are paid by
the hour.)
17. Expenses. Do you pay the worker’s business or travel costs? (This tends to show control.)
18. Tools and materials. Do you provide the worker with equipment, tools, or materials?
(Independent contractors generally supply the materials for the job and use their own tools and
equipment.)
19. Right to fire. Can you fire the worker? (An independent contractor can’t be fired without
subjecting you to the risk of breach of contract lawsuit.)
20. Worker’s right to quit. Can the worker quit at any time, without incurring liability? (An
independent contractor has a legal obligation to complete the contract.
Despite all that if you file a corporation, tell the IRS your corporation is a pass through entity, you can work for these small companies no problem and nobody will say otherwise, and in fact the government likes it. It is true the company where you do work won't be able to tell you that you can't take Friday off, but you will be able to work for any company anytime. The government wants people to work, they want commerce to happen, and in this case as you are a representative of the corporation the government sees that positively despite all the threats about rules for independent contractors it works. Talk to your accountant they can set it up, it may vary by state how you have to do it but there is a way to make it shine.
Its only when they start getting over hundreds of employees there is always an internal accountant that starts worrying if you still qualify and so on, but you still do. When it is 4 or 8 people at a company nobody cares.
What was the number of employees in the smallest company you have worked for? Was it less than five? I've worked at 9 businesses throughout my life, and NONE of them provided a written offer letter. When you are hired at the interview, you really don't need an offer letter, it isn't a contract.
The smallest company I've ever worked for had at least a few hundred employees. Maybe in smaller companies offer letters aren't the norm. My job experience doesn't include working for a company with only a few employees.
Wirrten job offers are very standard and it's a red flag that he considers the request inappropriate. The size of the business is irrelevant. I agree with everyone who said you dodged a bullet. I'm sorry that this happened but I think you are better off!
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