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Joseph
Joseph, Lawyer
Category: California Employment Law
Satisfied Customers: 5274
Experience:  Extensive experience representing employees and management
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We recently fired a 1099 employee when we discovered he was

Resolved Question:

We recently fired a 1099 employee when we discovered he was attempting to steal. He is now asking for his final wages, however, he is showing a negative balance at this time. Once jobs get billed to the customer & the customer pays, the 1099 employee then gets paid. We expect there will be a positive balance if the customer pays & is happy with the product, however this is not a certainty. Profits & losses are shared 50/50. There is only a verbal contract, which has been in place for the last 4 years. Are we obligated to pay this employee for a job that has not yet been billed & there for he technically shows a negative balance?
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Joseph replied 1 year ago.
Hello,

My name isXXXXX am a licensed attorney, and my goal is to provide you with excellent service today.

That depends on whether the '1099 employee' is an employee of independent contract?

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

(There is no such thing as a 1099 employee). Please tell me what you think after answering these questions about the employee. If there's any doubt, it's likely your '1099 employee' is an employee not an independent contractor.

Customer: replied 1 year ago.


Yes, he is an independent contractor

Expert:  Joseph replied 1 year ago.
Hello Erin,

In that case, you have no obligation to pay the employee anything until you receive payment from the client for the job.


If the independent contractor were an employee, he would be entitled to receive all owed wages within 72 hours of termination, but since he is an independent contractor, no such provision exists in the law.

I hope the above information is helpful.

Please let me know if you have any clarifying or follow up questions as I want to ensure that you are completely satisfied with my service. Please contact me first if you are contemplating leaving me a negative rating, as I’ll be happy to continue to address your concerns until you are completely satisfied with my service.

If not, please remember to rate my answer positively so I get credit for my work. (It doesn’t cost you anything extra and is necessary even though you’ve made a deposit). Please also rate me highly (9-10) when you receive your customer satisfaction survey as well.

Thanks and best of luck!

-Joseph



Customer: replied 1 year ago.


So, just to clarify...


 


When someone is a "1099," they are an independent contractor, correct?


 


In order for California Wage Law to apply (where wages would need to be paid within 72 hours), the employee would need to be a W2 employee?

Expert:  Joseph replied 1 year ago.
Yes, exactly. 1099 is independent contract. W2 is employee.
Customer: replied 1 year ago.


I'm a little confused. I was reading another QA chain on the justanswer.com website & the Employment Law Expert stated the following:


 


"Absent a contract setting out the terms of what would happen in this situation [i.e. terminating a 1099 employee], firing a contractor without any prior notice requires an employer to pay all wages owed to the contractor immediately upon termination.


However, if there is a dispute concerning the amount owed, then you pay the 1099 employee the undisputed amount and refer the case to the California Department of Labor Enforcement for the remaining amount."


 


Is the above expert's answer also correct? In our case, is it because the 1099 contractor is currently showing a negative balance that we are not obligated to pay him at this time? But that we can delay paying him until our customer pays?


 


 

Expert:  Joseph replied 1 year ago.
No, the above expert's answer is not correct. Those provisions ONLY apply to employees. It is absolutely unnecessary to pay an independent contractor all wages due within 72 hours (including wage disputes).

You have no obligation to pay him anything currently since he has a negative balance and can wait to pay him till your customer pays you.
Joseph, Lawyer
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Experience: Extensive experience representing employees and management
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Joseph
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