Hi,
I was employed at a small shop in New Jersey for the last 4 years. My co-workers and I were all hourly employees being paid by check through a payroll company (ADP).
Tax, SSI, UED, Med, IRA, dedections were all recorded on our pay stubs.

In March 2008, our employer stopped using the payroll company and started paying us with his own company checks. These checks were written out for our net amount (after deductions), but pay stubs were not provided despite repeated requests by several of us employees.

In July 2008, the company went back to using the payroll company, and stubs showing our deductions were once again provided. The year to date earnings on our stubs however are now missing 4 months of earnings. Anonymous calls were made to the Dept. of Labor, and they came in to investigate. They were not shown these company checks.

Our employment has now ended, and I applied to collect unemployment. We apparently are not entitled to the full benefit because of these missing wages. I recently called my former employer to confront him about not reporting our wages, and he told me we're all getting a 1099.

I filed an appeal with N.J. Unemployment, as well as a formal complaint to Department of Labor.

My question is...

Can he do this? Is it legal?
Thank you in advance,
62fender

Are you saying that he changed you from employee status (W2) to independent contractor (1099) without your knowledge but the checks remained in the same amount with a deduction for SS?

If he subtracts SS you're an employee, not an independent contractor so I'm confused.

Thank you for your quick reply! :)
In a word, Yes.

The hand written checks for that 4 month period (March, April, May, June), were for the net amount, as they would be with after all deductions withheld (including SS).
The problem is that we were not provided with stubs showing these deductions for that 4 month period.
Also, he never paid these "withheld" deductions for that 4 month period in to the proper places: SS, Unemployment, IRS, STATE, or FED.

He did not report any of our earnings from this 4 month period at all. My year to date earnings are missing approximately $20,000.00 for 2008. I found this out when I went to collect unemployment. I haven't received a W2 or 1099 yet.

I was an hourly employee the entire time I was employed there, and was never approached about becoming an "independent contractor". In fact, every time we asked about the "missing" year to date earnings on our paystubs (after we went back to the ADP checks), we were told, "oh yeah, I gotta have them updated".

Now I'm told by this clown, that he's 1099'ing all of us. We were all permanantly laid off due to business closing.

Thanks again
62fender

Three words - Wage and Hour. Maybe a fourth word - Complaint. :D

I cannot thank you enough!!

I feel so much better now, knowing this sounds to be something he cannot do legally, and get away with.

I did contact the Department of labor, and have filed a formal complaint.

I included copies of some of the hand written pay checks I deposited I was able to get from my bank. I couldn't get them all because the ones that "bounced", I had to give back to him and receive the cash equivalent of the check in return (also net amount). These checks when compared to the ADP checks, should prove the amount was net pay.

I also included:
Copies of my W2's from 2006, and 2007
Paystubs from my ADP checks
A copy of a signed and dated letter my former employer had faxed to my mortgage co. showing my "correct" year to date amount as of September 2008.

I hope it's enough. I'll let you know the outcome.
A huge thanks again,

62fender

Come back and let us know how this works out - I'm always amazed by employers who think they're above the Law.