If a company emails me with this, is this a form of fraud?
Also I forgot to ask you if your getting any type of other income because sometimes our aides collect unemployment or something else and they dont want to pay more taxes or get their benefits cut off so they ask us if we can pay them cash so we have an Independent contractor form for them to sign just stating that they dont want any benefits from our company, we dont record any of your income for tax purposes so you'll get straight cash and dont have to worry about taxes, or do you want to be on payroll then I can email you the W-4 forms. Let me know.
Specializes in psych, addictions, hospice, education.
Is this a way for them to avoid paying benefits or paying their part of the tax they have to pay for your work? FICA, I think it is...but I could be all confused too...
Is this a way for them to avoid paying benefits or paying their part of the tax they have to pay for your work? FICA, I think it is...but I could be all confused too...
Yes, I believe it IS a way for them to not have to pay taxes on their employees.
if someone is collecting unemployment, they are certifying that by receiving a check they are NOT EMPLOYED. Wonder where they would stand if they got heur on the job, working for the contractor...
However, it is not kosher for an employer to have some employees independent contractors while others are employees when these employees all do the same job in the same manner.
To a point, it happens a fair amount in my field of medical transcription. Companies will employ MTs (and can therefore promise certain hours of MT coverage for clients requiring strict document turnaround time) and also have independent contractors, but it is ultimately supposed to be up to the IC to set his or her own schedule on a daily basis. Those ICs and employees do the same work the same way with the same programs with the same computer requirements.
HOWEVER, there are many MT companies that try to get away with classifying their MTs as independent contractors (for the company's monetary benefit regarding taxes) while insisting the IC MT work a schedule, which is a no-no for the IRS's idea of an independent contractor. I am an employee MT and was able to choose my working hours, but I am bound by my employer to work those hours, which is exactly how it should be. I just cannot imagine the OP's situation even allowing for an IRS-approved independent contractor sort of situation.
I remember when I was an IC a few years ago, I could make up to $600 yearly from each clinic before it would have to be claimed on my taxes. I don't know if that has changed, but maybe this place the OP mentioned is planning on keeping their "ICs" until they make up to $600 and then kick the ICs to the curb and thus avoiding paying taxes. Yippee.
What gets me is that some of their employees are able to retain benefits because they are not reporting extra income *scratches head*. It's probably none of my business but that bugs me.
if someone is collecting unemployment, they are certifying that by receiving a check they are NOT EMPLOYED. Wonder where they would stand if they got heur on the job, working for the contractor...
In my state you can work part-time and receive unemployment from your previous employer. The benefit amount is prorated based on the earnings from the part-time job. I'm not clear on the rules if one is an independent contractor, though...
It almost sounds like this place preys on people receiving unemployment but needing more money. The "IC" is dependent on this place for more money, because this place is probably the only place a CNA can find crass enough to promise this tax situation. Since the "IC" is dependent on this place, they are able to take advantage of this situation and demand employee behavior from their "IC" without fear that they will be reported.
Specializes in L&D; GI; Fam Med; Home H; Case mgmt.
Thanks for the responses.
What gets me is that some of their employees are able to retain benefits because they are not reporting extra income *scratches head*. It's probably none of my business but that bugs me.
It's totally your business, and everyone else who pays taxes. These people are collecting unemployment, paid by taxpayer dollars. If they don't qualify because they're making too much money, they shouldn't get unemployment benefits! It's definitely fraud on both sides.
If you are an independent contractor you are not eligible for employment benefits from that company and that means that you cannot claim unemployment benefits should they decide they don't need you later on. Legally if you receive a 1099MISC because you filled out that paperwork for them you have so designated yourself a "vendor" and not an employee.
It's totally your business, and everyone else who pays taxes. These people are collecting unemployment, paid by taxpayer dollars. If they don't qualify because they're making too much money, they shouldn't get unemployment benefits! It's definitely fraud on both sides.
Employers, not taxpayers, pay unemployment insurance to then be claimed by eligible former employees when necessary. This is why employers will sometimes to fight tooth and nail to prevent even a former employee's very legitimate unemployment claim; the unemployment insurance premium paid by the employer may go up with the claimant's payout of benefits.
Regardless, it's totally dishonest to collect unemployment and then make an amount of money under the table that would otherwise reduce or negate the unemployment benefit, and then for this outfit to essentially condone it? Ugh.
Specializes in L&D; GI; Fam Med; Home H; Case mgmt.
Employers, not taxpayers, pay unemployment insurance to then be claimed by eligible former employees when necessary. This is why employers will sometimes to fight tooth and nail to prevent even a former employee's very legitimate unemployment claim; the unemployment insurance premium paid by the employer may go up with the claimant's payout of benefits.
Regardless, it's totally dishonest to collect unemployment and then make an amount of money under the table that would otherwise reduce or negate the unemployment benefit, and then for this outfit to essentially condone it? Ugh.
During periods of extended unemployment (such as we're seeing now), much of these benefits must be paid out from taxpayer dollars, as there is not enough to cover them with only the employer-paid unemployment taxes. That is why the GOP was trying to block extending these benefits to 99 weeks (or whatever it was, can't remember) - because there was no "pool" of tax revenue to pull from to cover these extended benefits. They were trying to get this administration to use leftover stimulus money instead of going further and further into the hole - which is essentially exactly what happened. They aren't heartless - they were trying to avoid further and further national debt.
When I work as an independent contractor in a different field (I am also a musician and frequently have a church organist position "on the side"), I get a 1099 reporting my income for the year, and that info is certainly reported to the IRS by my employer. I'm also responsible for paying the taxes (including FICA) on the income earned.
The IRS has v. specific guidelines for what conditions must be met to qualify as an independent contractor, and I have a hard time imagining that home health aides working for an agency would meet those guidelines.
I would avoid getting involved with this agency if at all possible. Somebody, eventually, is going to end up in serious trouble ...
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Whispera, MSN, RN
3,458 Posts
Is this a way for them to avoid paying benefits or paying their part of the tax they have to pay for your work? FICA, I think it is...but I could be all confused too...