Is it illegal for a pet groomer to be a 1099 sub contractor?
I am a pet groomer and I work for someone in their business. She has me on as a 1099 sub contractor but I work for her in her establishment. I'm scared this is hurting me in the long-run with all of the taxes I am going to owe. My anxiety is through the roof about this and I can't even sleep thinking about it. I don't know what to do.
3 attorney answers
If you are a 1099 subcontractor you will be responsible for paying taxes on what you’ve earned. You should contact an accountant if you are concerned about paying what you will owe at year’s end.
There are two steps to this question. First IF you are really supposed to be a contractor, you will pay the normal income tax plus the social security and medicare part which is a total of 15.3%. Not the 7.65% and the employer the other 7.65%. Over two million workers are estimated to be categorized by their employer as "contractors" while in reality they are employers. It is a form of fraud and theft from a true employee. Here are some questions you can answer.
The extent to which the services rendered are an integral part of the principal's business.
(are you grooming and the business is a grooming shop for pets?) If yes, that says you should be an employee.
The permanency of the relationship. (are you hired for one day a week, or seasonal, or part-time, or for three months while some one is out. if so that says you are a contractor. But if you work say 30 hours a week then that says you are an employee.)
The amount of the alleged contractor's investment in facilities and equipment. (are you invested and own part of the business or use the companies facilities. For example, do you work from home. If you are working on site at the employers facilities and use their sinks, hair blowers, etac. then you are probably an employee.)
The nature and degree of control by the principal. (Can you cut and groom anyway you want, or does your boss tell you to meet certain standards... How much leeway do you have in how you do your job. Are you free to groom anyway you want, or are you told how to cut and bathe, etc.)
The alleged contractor's opportunities for profit and loss. (Is a large part of your compensation based on how much money the employer makes overall or is your pay based just on how many animals you groom, or how many hours you work, or do you share in the fee for the groom like 40/60, 60/40)
The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
The degree of independent business organization and operation. (Are you actually being paid as a corporation, and have your own business cards with your company name OR that say the name of the employer. If the name of your employer, more evidence you are an employee.)
Also are you just renting space and sharing the proceeds. Also can you groom animals at your home on your own time.
Who sets the prices for what you do.
Have you signed a non-compete contract.
Use products supplied by the employer.
These questions and their answers will show what your true status is.
Contact one of us here at Avvo.com using avvo's Messenger. Give us you phone number and a good time to call. We cannot contact you first. That is against the law. You need a lawyer to guide you through the delicate process of talking with you employer. You should save a lot of documents before talking to the boss and you can legally tape your conversation. You should have advice for that part. Most of us offer a free consultation at a time convenient for you including after hours and weekends.
The materials presented in this answer are intended for general informational purposes only. These materials should not be used as legal advice applicable to the reader’s specific situation. These answers are only guides and generalizations as we have not interviewed you and asked questions that would shed light on your specific situation. In addition, our provision of this information to the reader in no way constitutes an attorney-client relationship. Every worker seeking representation should talk with several attorneys to better understand their situation. We cannot talk with you first, you must contact us. I always recommend making first contact with avvo's Messenger. Leave us your phone number and a good time to call and Never talk with us from you work location. Call after work on or a weekend. Ralph A Powell (215) 439-7781...
The answer to this question will require a detailed review of the facts of your empoyment/contractor relationship with the business for whom you perform the services. As a very generic answer, the legal analysis goes mainly to whether you are subject to the direction and control of that business or company, i.e., whether you work a set schedule, whether you perform the services at their location, whether you are licensed by the State of New Jersey or other jurisdiction to perform those services, whether you receive monies directly from the persons whose pets you are grooming or from the company or business in question and whether the standards for performing your work are set by said business. In addition to tax issues, if you are paid as independent contractor and receive only an I.R.S. Form 1099, you may not be elligible for unemployment insurance if you are discharged, as no such taxes have been paid by you and the company for same in each pay period. If you are truly an independent cotnractor, you may want to set up an LLC or other business entity to protect you from liability, obtain insurance and/or advise clients in advance of the limitations on your liability, i.e., customer waiver. You need to speak to an attorney to review the facts in detail and have him/her provide you with an opinion on this issue. Many "employers" try to get away with paying "empoyees" as contractors to save themselves money; there are both practical and legal aspects of this which need to be sensitively handled and for which you may have protection if you raise with your "employer." Whomever you select to assist you, I wish you the best in resolving these issues.