I don't know what to do... my bosses again

[Moirae]

Help! Ok, I don't understand what I'm doing and I'm so upset right now because they did it to me AGAIN.

http://www.customerssuck.com/board/s...d.php?t=110383

So I haven't been outright fired this time. Instead the owner wants me to go to contract labor which sounds about 14 hours a week. Maybe. I make $12 an hour and normally work 40 hours a week. I just got the raise, and my boss was talking about how good I am and how excellently I do my job, publicly praising me, and all the rest. My boss didn't even know the owner was going to do this and says they have been arguing about it for months because my boss wants me to continue working the way that I am because she wants everything done but he wants to say to hell with anything more than a year old and ignore it (even though legally he can't do that because all the taxes and the like need to be accurate).

Now I don't know what to do. Yes, first thing is look for a new job, but I had to take TWO anxiety pills today to stay calm and not sit here bawling like a baby. I took one at 3 am last night, and then another at 2 pm today.

I am NOT in condition to look for another job right now, I need at least a couple days before I start doing anything.

But I am sooooo confused. I don't know whether I am actually going to go to contract work, or if I'm going to part time employee or anything because my boss hasn't answered her phone or called me back with my messages so I don't know what's going on.

BUT, I also know that as a contractor I'd have to pay the taxes on my own and file quarterly, then make a final filing at the end up the year. I NEED to keep money coming in while I look for another job. I have bills to pay so I can't exactly say no.

So if I were to continue to want my take home to be $12 an hour? How much should I ask for to ensure that my taxes are paid since I have to pay income tax and self employment tax? And frankly, I'm tempted to ask for more like $15 an hour.

Please help. I left a call for an accountant to ask these questions but he's gone and I am so lost.

[EricKei]

No matter what else you do -- Update your resume and start looking ASAP if you haven't already. It sounds like the owner is trying to save money by any means possible. He is unlikely to give you a raise to help cover the taxes, as that would go against his "saving money" thing... It also means that, while you are free to keep working for him or not at that point (you don't even have to give notice unless the contract you MUST sign at that point says otherwise), it also means he doesn't have to give you benefits once you're being paid as a Contractor.

Honestly, it sounds like you're being cut to a total pay rate that's insultingly low that he hopes you will quit, and thereby render yourself ineligible for Unemployment compensation (at least, in the US); becoming a Contractor may render this moot anyway. Note that, if you can prove that he's doing that (talk to the local Labor Board - it's free!), you may have a case for Constructive Dismissal.

Contractor filing -- OVer a certain (fairly small) amount paid, yes. Look it up (under 1099) on the IRS.gov site. If you have to do this, you also need to send in *some* tax money as an estimated payment each quarter, even if you anticipate getting it all back with your Return.

As for the taxes, the whole point of it is that you are on the hook for what would normally be considered the "employer" portion of the taxes to be paid -- which is roughly half. Basically, double the amount that was normally set aside (per hour) at that payrate and use that as a baseline. If at all possible, get professional tax prep help on this, even if it's a popup location. At the rate you're describing, you may not owe any net taxes at all this year anyway (due to the automatic refund ($3,500??) that everyone gets if they do NOT Itemize); again, this is a question for the tax prepper. If that happens, then that money you set aside is available to spend. If not, you probably don't need to send all of it in, but at least you'll have it. File as soon as you get your yearly W-2 and 1099 forms (deadline to mail it to you is the first Monday in February, IIRC (please correct me if I have the wrong numbers)), as you should get the former for your normal wages and the latter for your Contractor wages, if any.

[csquared]

PM Tax Guy Karl.

[Moirae]

If I'm on hook for half, I'll be totally $70 a week take home after all those fees. Maybe less. I'd be making like $5 an hour. Isn't that illegal?

[Ironclad Alibi]

If you are going to be a contract worker your pay needs to be at least twice what you are making. Not only are you paying both parts of social security, there are other costs that your employer is now paying that he will be saving. These cost are now placed on you. You will no longer have health benefits, sick leave, vacation leave, holiday pay, and other benefits such as unemployment compensation through your employer.

There have also been cases where an employee is converted to a contract worker and the business still treats them as an employee, which is illegal.

Get lots of advice about this. Then find a new job.

[Moirae]

So I contacted my local unemployment center. They gave me some numbers to call including the IRS but every time I call the IRS, and get to anywhere I need to be, it says the topic is only answered during tax season. I need to find out whether what my bosses are doing is even legal because the unemployment center said that if my job isn't changing but they are forcing me down to contract labor part time and I'm losing all benefits and everything that doing so may be illegal but I need to talk to the IRS to ask. The guy at unemployment says it all sounds fishy to him.

They also gave me two other numbers to call to find out my rights but it's almost 5 pm already. I feel like banging my head against the table.

[EricKei]

Seconded, yes, absolutely, talk to Karl; He's the man to ask.

The MW may or may not apply to contractors, as they could be considered Exempt -- Also, the government cares what you are making BEFORE taxes when it mentions minimums, non-tax deductions, etc. -- not after. If your rate is unchanged, yeah, that's another HUGE red flag. Talk to the Labor Board (or local equivalent) ASAP; according to all I've heard, they don't normally charge for consultations, and work on a "we take a percentage of the final payout, and then, only if we win/settle" basis in case of a lawsuit being filed on your behalf.

edit: Ya ninja'd me ^_^ Labor Board, too. The Unemployment office deals with after you unwillingly leave your job; they're trained professionals, but most of them are not gonna be lawyers. The LB *will* have lawyer access.

Most importantly: DOCUMENT everything you can. Your concerns, the wage differences, a copy of the contract they want you to sign (if you don't have a contract, you're not a contractor!!)... Fire up Word/OpenOffice/Notepad++, whatever. Type it, spellcheck it, run it thru Grammarly, fix it, check it again, and print it. They will LOVE you for it, and will be able to give you an answer that much more easily.

[Moirae]

So we've been doing some calculating and I'd like to hear your thoughts.

If I go with regular unemployment including both hotels as one entity, I'd get $247 a week for 26 weeks. If I file for both hotels separately since I receive separate checks for each, it would add up to $262 per week.

If I tell him I want $400, it's about $200 less I'd get per month, but I could continue doing it after I find a full time job.

They never told me this was going to be a temp job. If they had done that, I'd have just done it while i was looking for another full time job. They could have given me some warning they were doing this. I should be a manager in this company. Only my husband, one other employee and I have so much knowledge, and have done so much for him, and he insists on repeatedly treating me like total shit.

So what would you do if you were in my place?

[TheSHAD0W]

I would say, refuse to sign a contract and let them fire you. They can't claim your refusal to sign a contract as cause, so you'd get unemployment. $262 is simply not enough more than $247 to make a difference and it will give you more time for your job search.

[Aria]

I think I would make them fire me so I could be eligible for unemployment. It sounds like this contractor thing is a completely losing proposition and also outright insulting. >_<

[Irving Patrick Freleigh]

IANAL, but I believe there are certain conditions that must be met before you can be considered a contract employee. Might be worth contacting the local Department of Labor folks if you haven't already.

[taxguykarl]

This form has the info on payment schedule and how to calculate the amounts for quarterly estimated taxes. If you end up owing more than $1000, there is a non-payment penalty...so double check your figures.
FWIW, you can claim expenses that you couldn't claim as an employee (e.g. commuting to and from the workplace). Your annual return will include a Schedule C and a Schedule SE.
If you do have a refund coming with your annual return you have the option of having that amount credit as an estimated tax payment.

[Moirae]

I was fired today. And he couldn't even be bothered to tell ME. The owner told my husband to just bring all the paperwork back and made HIM tell me. No reason given.

[TheSHAD0W]

<emails cookies>

Well, at least now you don't have to be worried about it any more! @_@

[EricKei]

That sucks x.x You have sympathies all 'round. v_v

Well, go ahead and file for Unemployment as soon as the office is open, then seriously consider talking to the other agencies we've mentioned.