QUESTION

1099 vs w2

Asked on Nov 18th, 2014 on Employment Contracts - Michigan
More details to this question:
i'm a college student worked this past summer for a slum lord and he paid me $10.00 an hour "cash" worked about 10 hours per week. A few weeks into working for him he decided to give me a check but never took taxes out. Now he is asking me for my social security # for an IRS 1099 form. I believe this is misclassification - I am a college student looking for a few bucks to eat - not a contractor. I would like to know if i have a legal case to sue him for mis leading and mis classification of employment?
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1 ANSWER

Appellate Practice Attorney serving New York, NY
Being a college student has nothing to do with whether you were an employee or an independent contractor.  That distinction turns on the amount of discretion and authority you had in doing the work.  If the slumlord told you what to do, how to do it, where to do it, and when to do it, you are properly classified as an employee; if he told you what he wanted done and the details were left to you, you were properly classified as an independent contractor.  For example, if my client tells me he wants me to negotiate a contract for him to sell his house, I am an independent contractor; the client doesn't tell me what to say to the other side's attorney, when to call, what specific language to include.  However, if I work for a law firm, which tells me where my office is, what cases I have to work on, when I have to be in the office, etc., I am an employee of the firm. The lines are not always clear.  For example, you say that you were an employee, but, if so, there should have been taxes withheld from your compensation.  It may be that you thought you were being paid "off the books", and didn't plan on reporting the income, but that's probably not what you want to tell the IRS. The slumlord wants to classify you as an independent ocntractor because, if you are a contractor rather than en employee, there are certain taxes he does not have to pay.  However, just because he has an incentive to classify you that way doesn't mean that he is wrong. As to whether you can sue the slumlord, you can challenge the classification, but I don't think you have any basis to sue the slumlord for damages because, as of now, you have not suffered any; if the classification stood it might affect the amount of social security you receive in the future, but, again, you can take care of that by challenging the classification (honestly, I'm not sure what forum you would mount such a challenge in in Michigan, possibly in the Department of Labor.  Giving you a 1099 may force you to pay taxes, but you were supposed to pay them anyway sou you can't claim that as damages.
Answered on Nov 19th, 2014 at 9:23 AM

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