We have been employed by the church since 2006 and we have always been an employee receiving a W-2 at the end of the year. In the past month, the church got together and voted without our knowledge, for us to become Independent Contractors therefore not being W-2 employees of the church anymore. Can they legally force us to become IC's? We use the church's equipment and cleaning supplies. ( We are a commercial cleaning service that began operation in 2007, but since we have been cleaning the church since 2006, we preferred to keep our relationship with the church as employees receiving a W-2 and not a 1099 for the simple reason that it helped us with our taxes as well as other benefits. Thank you for your help.
I agree with the prior lawyer. The IRS code has specific definitions, and the factors that are used to determine if someone is misclassified are very fact-specific in application in federal case law. For example, using the equipment of the church, being subject to discharge by the church, and the church controlling how you do the job all support "employee" status. The fact that you have other customers, though, supports a classification of a "contract" worker. The fact that you have previously been classified as an employee and will continue to do the same job also supports the continued classification of employee. Misclassification can result in severe fines for the employer. An attorney in your area could help you further explore this and determine if you have any substantial damages or standing to challenge their action. My guess is that if you challenge them, though, they may just find someone else to do the job.
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This is a fact specific determination - the IRS has guidelines that organizations can follow to determine whether people are employees or independent contractors - simply stating that one is an independent contractor does not make it so.
Take a look here: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
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