QUESTION
I asked client to reclassify me from 1099 to W2 after 3yrs of work, then get terminated. Do I have a wrongful termination case?
Asked on Jun 25th, 2018 on Wrongful Termination - New York
More details to this question:
Hello, I began working remotely for a wholesale company based in Los Angeles, CA in Nov 2015. My job was to build a custom order form, like their existing pdf but for the web. In 2015, I made about $7k on 1099. I continued doing work for them thru 2016, and was 1099'd for another $60k. In the third year, I continued doing work for them I got $143k 1099. Back in February, I spoke with the client about requesting to be W2'd because he was adding money paid to freelancer coders used to build the site under my 1099. The client never responded to me about the change, and has terminated me since June 1st several months after I made the request. The client was responsible for telling me exactly what work needed to be done throughout my entire time working for them. He had 100% control of the work I've done. I want to get help from IRS to see if in fact I should be reclassified to W2, and want to know if I have a case against them for wrongful termination.
1 ANSWER
Do you fall under the labor and employment, computer employees exemptions pursuant to the Fair Labor Standards Act (FLSA) or New York's Wage and Hour Law? The following NYS Department of Labor link might help:
https://labor.ny.gov/legal/counsel/pdf/Other/RO-09-0054%20Computer%20Employee%20Exemption.pdf
You are correct. Control is important. But there are exemptions, under federal and state wage and hour laws, regardless of control.
One exemption applies to computer employees. Were you one? You stated some skills which sound like ones applied by computer employees. Developing custom order forms, working with pdf style documents, posting such forms on the web for potential interactivity? Labor and employment experts should carefully evaluate the skills you applied and the duties you performed.
Neither employers nor employees determine 1099 status nor W-2, Wage Theft Prevention Act (WTPA) compliance in New York. Those determinations are made by the Department of Labor (DOL). 1099 versus employee status is not governed by private contract. Even private employment contracts, drafted by lawyers, calling some workers independent are wrong. But if those "independent contractors" are exempt, regardless, under federal or state wage and hour laws, would such errors be material or relevant?
If the above has confused you then you are not alone. Call the state or federal DOL for clarification.
Regarding wrongful termination, did you have a contract which was broken or were you subject to discrimination? Assuming you were non-union, non-government employed, not subject to a term certain written employment agreement, how were you discriminated? And how might the IRS, dealing with income tax, help you?
Answered on Jun 26th, 2018 at 10:26 AM