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okmit10 · May 16, 2007, 01:09 PM

Hello: I have been employed by a company for 9 years with excellent performance on my part and have had no issues with my employer until now. The company began letting valued employees work remotely in October when an employee relocated to the mid west from the east coast. This fairly new employee was allowed to work from home rather then terminate. In January I informed my Supervisor(CEO) that I planned on Moving to AZ effective 1/1/2007 and would like to continue to work for the company remotely. I was given the things were going smoothly. I am using the PC I had at the office and working from home. My job has not changed and I continued to receive regular paychecks electronically deposited in my bank. On 4/2/2007 I was informed that all remote employees were going to be reclassified as independent contractors effective 4/9/2007 so the company would not have to register to have employees in different states because it would be too expensive for them. . I still continue to do the same work. My employer did increase my hourly rate but not enough to cover private disability insurance, LIfe insurance etc. I also do not have vacation time or sick time. Do I have any recourse?

ebaines · May 16, 2007, 01:57 PM

Here's a site that might help expain whether it was proper to classify you as an independent contractor:

Work at home independent contactor classification by the IRS.

Since the PC (and software, I asume) are provided by the company, you may have a basis here. Also, if they "treat" you like an employee (i.e. make you submit time sheets, set your work hours, etc) then you may also have a case. On the bright side, if you are a contractor you should be able to deduct your home office expenses from your taxes.

One other thing to consider - as an independent you will have now pay twice the social security tax rate.

excon · May 16, 2007, 04:06 PM

Originally Posted by okmit10

My employer did increase my hourly rate but not enough to cover private disability insurance, LIfe insurance etc. I also do not have vacation time or sick time. Do I have any recourse?

Hello ok:

Unless you had a union or employment contract, you have no recourse. Without a contract, you were employed “at will”. That's legal term meaning they can change the arrangements any time they choose. Of course, you are not obligated to go along.

As an indepentent contractor, you WILL be protected by a contract and that's good. You CAN seek other business, that's good. You can hire help when the new business get's to be too much, and that's not bad. In short, you have an opportunity to get rich. Of course, there are some people who would rather have the security of a JOB. But, as we've just discovered, without a contract, there is NO job security. From my own perspective, I would rather rely on myself than others.

You also have the ability to negotiate your contract. This would be a perfect time. Certainly, the company has every right to cut its costs, but not at your expense - unless you let them.

Go see a CPA. Find out exactly what your costs are as an independent contractor. Ask your boss to cover those costs. If they won't, then you have decide whether it's worth your time to continue your relationship with this company.

excon