[ALparalegal77]

I have a question. I know this may sound dumb but I just got a job as a Paralegal and my boss told me that I would be paid $10/hr at 30 hours a week with contract pay. My question is, "what is contract pay"? I* know that I may supposed to already know but they did not teach that in school. Can anyone provide me a logical answer to this because I am completely clueless. Thank you bunches in advance:confused:

DEANNA

[twinkiedooter]

From your wording the word "contract pay" sounds like he's not going to be taking out any taxes from your paycheck.

[ALparalegal77]

Thank you lots!

[twinkiedooter]

You also should be careful with this employer. I was a paralegal in Florida for many years and the attorney basically "used" me as a cheap attorney to do certain work for him. Be sure you do only paralegal stuff and not attorney stuff for him so you won't risk your paralegal status. Also if you are a notary, be very careful never to notarize any paperwork without the person showing you proper ID and noting this in the jurat section. I had to decline notarizing things several times due to "Oh I don't have my driver's license with me today" kind of lame excuses.

[excon]

Hello paralegal:

In addition to what twink said, you should know that there are really only two kinds of entity's in the workplace. There are employees and there are contract workers - that's all.

Contract workers, if that's what you are, are self employed in terms of their relationship with the IRS. The term "contract pay" also implies a written agreement between the contractor and the contractee, spelling out the details of the "contract"...

It would reasonable, therefore, to ask to see a copy of the contract that binds you. If none exists, I think it would be reasonable, as a contractor, not to mention a paralegal, to ask that one be drawn up and signed.

Otherwise, it would be my view, that he's trying to get the benefit of BOTH classifications, by treating you as an employee, but paying you like a contractor.

Uhhhh, that's not legal. This is especially troublesome because he's a LAWYER.

excon

[mack20007]

A contract is not "required", for self employment work. Often times it is not. The term "contract work" is loosely used to describe self employment work, when no physical contract is actually involved.

This determination of whether you're self employed or not, is not made by the employer/payor alone. It is decided by employment law.
There are specific rules outlined that determine whether work is employment related or self employment. The employer cannot on his whim alone make the determination whether you are self employed.

These employment rules are summarized in Publication 15A, which can be downloaded from the IRS's website, and elsewhere. If after reviewing these rules, you believe your employer/payor is treating you incorrectly, you need to decide if want to draw the line in the sand with this employer, as this may result in you're being discharged, even though you maybe correct, and may have legal remedies for being discharged. So clarify this before you get too long into working there.

If you have any doubt, as to what your classification is, the IRS can assist, as it is extremely interested in employers who incorrectly treat their employees as independent contractors, as it is a direct violation of employment law. Employers try to get away with this because
They don't have to do the payroll paper work, of calculating your withholding, deducting your social security and medicare taxes, and matching it with money out of their pocket, and depositlng these taxes with the government as they are required to do, and keep all these records.

Most people aren't aware of this problem until April 15 when they try and file their taxes and they don't get a W-2 showing federal taxes withheld. Instead they get a F 1099Misc, showing income only. As no taxes were wittheld they usually owe on April 15, often a lot.

The IRS cans assist with this problem if you're in doubt, they have a form called an SS-8, which allows the IRS to determine definitively if you are an employee.

Don't be shy with your employer/payor, ask him/her if you'll get a W-2 at the end of the year. If so, they should have had you complete F W-4, and an I-9. Your paycheck should show various taxes withheld. If taxes are not shown ask the employer, it could be a legitimate oversight, or other issue, so you'll know. Some employers you should know are allowed to treat some employees like independent contractors, but this is a small area of employment tax law, and may not relate to you, if so, as he is in law he should sight a reference for you, which you can verify.

Keep asking questions

[ScottGem]

A contract is not "required", for self employment work. Often times not.

I don't disagree with this. But there is a difference between required and advisable. The OP is in a situation where her status is not well defined. This is not a good situation to be in. So if she is supposedly a contract worker, then it would be advisable to have a contract defining the terms.

By the way, I rarely do my freelance work without a "contract". Generally the contract is an e-mail specifying what I will do and what the client will do in return. But the point is, the terms of the relationship are spelled out. As an example, I'm doing work now and after the contract was agreed to, the client mentioned some additional functionality they wanted. I was able to state that it could be done, but it was outside the scope of the original agreement so we could discuss it once I finished the initial project.

[mack20007]

I'm not saying a contract should not be entered into. Her question was, what does "contract pay " mean. And the fact her employer told her this does not necessarily mean she is under contract is my point, as she maybe a legitimate empoyee, and her boss is violating employment law. Andif there is any doubt that's what a f ss-8 is for.

Once self employment work is decided in her case or otherwise agree, certainly a contract is advisable. A contract is advisable under any legal agreement.

I don't view her situation as bad for that reason
Her boss told her upfront she's paid "contract pay". She has options at the start. To ask for a contract or not. What would be bad is if he told her after the end of the year, and didn't withhold taxes because she's under contract. that would be a bad situation. Now she has options, and knowledge.

[excon]

Hello again,

I don't think anybody here disagrees much. There's the stuff ABOUT contract work. Then there's what she should DO about being told what she was told.

What she SHOULD do, once she understands the issue, is get clarification, and get it politely. There's no disagreement there.

excon