| Art Alexion on 8 Dec 2005 14:39:37 -0000 |
|
Sorry second sentence should have said "The *benefits* for the employer..."
Also forgot to mention that employers with dubious independent
contractors are usually treated as if it was a tax collection matter and
don't go to jail -- even though, and probably because, their employees
are getting screwed into paying the employer's taxes. Employers paying
under the table are treated as tax criminals.
Like the song says:
White collar crime
You don't have to do time.
Blue collar crime
Does time after time.
Art Alexion wrote:
>William H. Magill wrote:
>
>
>
>>This 1099 ploy has been used by shyster organizations -- both profit
>>and non-profit for many years to avoid paying Social Security and
>>other Wage related taxes (as well as minimum wage, and other wage
>>hour issues).
>>
>>
>>
>Falsely categorizing employees as independent contractors is a step up
>from paying employees "under the table". The for the employer are the
>same; better actually. The company who employs independent contractors
>can deduct their "fees" as expenses, employers who pay employees "under
>the table" cannot. (Employees getting paid "under the table" generally
>do not report their wages. This illegal practice allows the employer to
>pay about 1/3 less than prevailing wages, while the employee takes home
>the same amount. While the employer must forgo the deduction, he
>generally makes up for that by avoiding employment taxes, workers
>compensation, unemployment compensation, and the required bookkeeping.
>The employee generally benefits, not only in getting the same "take
>home" pay, but is usually hiding the income from the payer of some other
>source, like unemployment compensation or disability.)
>
>Employers on independent contractors not only get the deductions, but
>also get to avoid those same employment taxes and expenses.
>
>The independent contractors themselves, though, get fewer benefits from
>the arrangement. The expenses avoided by the employer are usually borne
>by the employee: higher employment taxes, layoffs without the ability to
>collect unemployment compensation, expensive personal health and
>disability policies covering job-related injuries instead of workers
>compensation. (It is amazing how many employers of independent
>contractors, on a small scale, are willing to admit the categorization
>"error" when faced by a personal injury claim from a contractor injured
>on the job -- under workers compensation laws, employees give up the
>right to sue employers in exchange for the no-fault workers comp.)
>
>Sorry for this long, OT drivel, but after getting so much help on
>computer issues through this list, it feels good being able to provide
>info on something I know, and which may be of help to others on the list.
>
>
>
>
>------------------------------------------------------------------------
>
>___________________________________________________________________________
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>
>
--
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Art Alexion
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