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Joseph
Joseph, Lawyer
Category: California Employment Law
Satisfied Customers: 5049
Experience:  Extensive experience representing employees and management
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My situation: I was a tutor for an interior design student,

Resolved Question:

My situation:
I was a tutor for an interior design student, after graduation we decided to start our own interior design firm. It was agreed that he would provide the financial investment and I would be mostly in charge of providing the design services for our clients. We have spent the last couple of months setting up the business (website, business cards, business license etc.) we are close to getting our first projects but have yet to make any profits.
While I appreciate the opportunity of being a "partner" I am not being compensated for my time and I understand this is "my part of the deal" I still debate on what to do.
The business is set up as a sole proprietorship everything being on his name.
Should I then be considered as an employee and be compensated for my time, or should I wait until the firm has profits and restructure the company into a partnership?
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Joseph replied 1 year ago.
Hello and welcome to JustAnswer.

I'm very sorry to hear about your situation and hope I can help.

My goal is to provide you with excellent service today.

Can you tell me if you have a partnership agreement in place with the owner of the sole proprietorship?

Have you asked him about compensating you as an employee yet?
Customer: replied 1 year ago.
I don't have partnership agreement with him. So even if it is set up as a sole proprietorship we can have a partnership agreement that we wouldn't ncecesarely present to the State of California, correct?

I have not asked him to be considered as an employee yet which is the reason for my question. I am not sure it is the right way to approach the issue. He provided the money and I provided my services so I am not sure if being compensated should be an option since I am not providing 50% of the investment.
Expert:  Joseph replied 1 year ago.
Hello Michelle,

You definitely should have some agreement in place with him even now to avoid the possibility of being taken advantage of if he is listed as the sole owner of the business.

If you are providing your services, you definitely should be compensated in some way. The company should definitely either be restructured as a partnership or you should be considered an employee.

Technically, though, if you are providing services to a sole proprietorship currently, you would be considered an employee under the law (or possibly an independent contractor) and would be owed compensation for your time.

The main determining factors as to whether you are an employee or not is if you are doing the work in your own time, your own space, and if you are supplying the instruments (computers, etc.) that you do the work with. If that's the case you would likely be considered an independent contractor and not an employee.

This is important since you would be limited to sue for breach of contract if you're an independent contract, while you could file a wage claim against him for unpaid wages if you would be considered an employee.

You can read more about the distinction here:

http://www.dir.ca.gov/dlse/faq_independentcontractor.htm

If you believe you should be considered an employee based on the above and are being denied pay for your services, you can and should file a wage claim, which you can do using the information available online here:

http://www.dir.ca.gov/dlse/howtofilewageclaim.htm

I hope the above information is helpful.

Since my goal is to provide you with the best service today please don't hesitate to ask me any follow up questions.

If you don't have any, please remember to rate my answer positively so I get credit for my work!

Thanks and best of luck!
Expert:  Joseph replied 1 year ago.
Hello Michelle,

Please let me know if you need any clarification or have any questions about my answer above.

If you don't have any further questions or need any additional information, please remember to rate my answer positively so I get credit for my work.

If you don't rate my answer, the website recoups your entire deposit and I get nothing for assisting you. Trust me when I tell you I need the money WAY more than they do, so I would greatly appreciate if you accept my answer!

Thanks and best of luck!
Joseph, Lawyer
Satisfied Customers: 5049
Experience: Extensive experience representing employees and management
Joseph and other California Employment Law Specialists are ready to help you

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