My job made me an independent contractor, what does this mean for me?

Nurses General Nursing

Published

Hello nursing world! My job (a small non profit clinic) apparently made me an independent contractor several months ago without telling me. They did so because it will help them save money? I graduated 2 yrs ago and am not familiar with independent contracting.I am wanting to know what this means for me in terms of protecting myself both legally and financially. The clinic does not provide malpractice so I have always carried my own. I work full time and have for 2 yrs with this company. It is my only job and I get a paycheck every 2 weeks.They clinic provides all supplies needed for PT care.I do not know if I need to sign any forms to stay legal or what this means for taxes. Should I ask for more money? Can they make the decision to make me independent or is that something I have to be part of? Is this a good or bad thing for me?Any help would be greatly appreciated!:nurse:

Specializes in pulm/cardiology pcu, surgical onc.
I am 100% sure that I am an employee by IRS guidelines, but they have me as an IC. I am not sure if others are ICs or not. I work for them 5 days a week and am def the most paid (25 an hr). I am so upset with this situation =(

If quarterly taxes are not being paid for this current tax year you can be fined by the IRS. I went through this personally this past year but got out of paying fines. It is in your best interest to get this figured out with your employer ASAP for your financial security. If they're not willing to be direct with you it's not worth what you're being paid in my opinion.

Up Vote Up Vote ×
Specializes in Health Information Management.

You love your job but they're pulling a sneaky, awful, costly (to you) move like this without so much as a form letter to inform you of the change in your status? How much will you love your job on April 15, 2011? No matter how nice your coworkers are or how much you like your daily duties, is the job really worth the tax burden, benefit costs, and potential for hefty IRS fines you now face? I know jobs are hard to come by, but for heaven's sake, get OUT of there!!

In the mean time, I agree that you should see an experienced accountant so that you can start arranging to withhold sums from your paychecks to satisfy your tax burden. And the Labor Board suggestion is an excellent one - the people there may be able to help you resolve this situation with your employer. A tap on the shoulder from a government agency may convince your employer to correct the company's "error" in classifying you as an independent contractor.

Up Vote Up Vote ×
If quarterly taxes are not being paid for this current tax year you can be fined by the IRS. I went through this personally this past year but got out of paying fines. It is in your best interest to get this figured out with your employer ASAP for your financial security. If they're not willing to be direct with you it's not worth what you're being paid in my opinion.

If she worked a whole year like this, then yes. However, it has only been going on for a couple months. You only need to pay quarterly estimated taxes if you are turning a profit. It would be fairly easy in her situation to reconcile everything come tax time.

None of what I just said changes the fact that she is getting hosed. Just that she is only going to work 4 months in 2010 as an "IC" (not really).

I just thought of something that is funny (to me). Assuming OP works a set schedule, she ought to go in monday at about 10am, work for a couple hours, walk out saying "see ya later" to at least a couple people not come in tuesday or wednesday and then roll in, in street clothes, at about 4pm on thursday. Of course, she'll be called far earlier than this, but if she was an IC this would be perfectly acceptable, perfectly illustrating the fact that she is in no way shape or form an IC. At which point she ought have her CPA and attorney sit down to figure out exactly what this "error" on the company's behalf has cost her and get it made right. Of course she would be well within her legal rights to include attorney and CPA fees as well. If they balk, well, then you can take them to court over the exact same thing and tack on some punitive damages besides.

Up Vote Up Vote ×

You should point blank ask your employer if they are withholding federal income tax, FICA (social Security), Medicare, and state taxes from your paycheck. If not you are indeed being treated as an IC and unless you meet the IRS guidelines incorrectly so. If they report back they have not been withholding, you need to call the IRS and turn them in... Believe me you will be in a much better position because the IRS will make the employer pay their portion of your FICA tax which is about 7.5%.

Your employer might get POed at you perhaps even fire you, but if they are willing to cut corners with taxes because it suites them what else might they be doing…

You need to act, if you do nothing you will get a 1099 at the end of the year and you will pay 15% in FICA, plus you may end up with a penalty for under withholding.

Up Vote Up Vote ×
Specializes in Med/Surg, Academics.
I assure you that if your hourly rate (if you are hourly) did not change, you received a big pay cut when you went from employee to independent contractor, even though your paychecks look bigger.

This. You got at least a 7.65% pay cut due to taking on your employer's portion of the social security taxes.

Plus, if you live paycheck to paycheck (even with the "bigger check"), you have only months to come up with the dough.

They screwed you over, girlfriend.

Up Vote Up Vote ×
Specializes in Emergency & Trauma/Adult ICU.

OP, any update on this situation? What explanation did your employer give?

Up Vote Up Vote ×

I meet with my boss today. Got my fingers crossed

Up Vote Up Vote ×

So they apologized for the "mistake" and are going to back pay all the taxes starting when they made me an IC. I am now an employee and back on payroll. I honestly believe they did not mean any harm and they are making it right.I am going to continue working with this company but def watch my back better.

Up Vote Up Vote ×
Specializes in Oncology.

I just wanted to say thanks for this thread. I'm really glad that they rectified the situation for you, OP. I'm still in school but I had no idea about this kind of a situation and the heads up for in case it happens to me in the future is good to know.

Up Vote Up Vote ×

Thanks for everyone who gave me the advice and courage to advocate for myself in this situation!

Up Vote Up Vote ×
Specializes in women/children, pacu, or.

I read this thread with much interest. I too, fell into this mire and now I am in a tax mess. I finally got a contract job thru an agency and didn't know I was a non-employee (aka IC) until I got my 1099 misc form a few weeks ago. I was hired by the hospital but had 2 1/2 months of pay thru the agency for the end of 2010. I've been a nurse for a long time and this was my first agency gig so I claim ignorance. I did think it was odd that I was getting a hand written check every week with no record of the usual deductions. I called the agency and they acted like it was no big whooop. I know that all agencies do not operate like this as many of my co-workers are former agency. I think this place is pulling a fast on as I did look up the information on the IRS web site and I clearly met the qualifications of an employee. I now have an extension on my tax preparations but I may still end up paying several K to the feds and 100's to the state. Is there any recourse? HELP!!

Up Vote Up Vote ×
+ Add a Comment