Employment Law Questions? Ask an Employment Lawyer.
Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification
This is an unfortunate situation, if you were paid a w2 wage,
and are terminated or being asked to become a contractor, you would be entitled to unemployment benefits,
If they are asking you to be a back up to their staff, and you would be performing the same duties as you were when you were an w2 employee, it could be a violation of the IRS and DOL rules,
The major difference between an employee and contractor is the relationship of the two parties, if the employer would still control your hours, and days of work, or they will supervise your duties, you would be considered an employee.
If they allow you to set your own hours, and days of work, and you are under their control you should be paid as an employee, and be paid a w2
If you have any further questions please do not hesitate to ask.
People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax.
If you are an independent contractor, you are self-employed. To find out what your tax obligations are, visit the Self-Employed Tax Center.
You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.
If an employer-employee relationship exists (regardless of what the relationship is called), you are not an independent contractor and your earnings are generally not subject to Self-Employment Tax.
The above is from the IRS rules,
I think you answered the most important part of my question regarding eligibility to collect unemployment. I have not specifically been terminated, but about 50% of my current job duties have been taken away. The other 50%, event planning, is what they want me to do as an independent contractor. In addition they want me to be a back up in case the person they have just hired doesn't work out, and they want me to perform those duties for less than what I was paid as an employee.
In terms of unemployment if you are facing a 50% paycut, you can also apply for partial benefits,
if they want you as a back up, they have control over you that is not normal in a contractor relationship. So if you choose to work in that way, you can file a wage complaint.
I could file a wage complaint even though I agreed to work under those conditions. With what agency would I file a wage complaint?
you would file a complaint with the IRS and wage and hour division, this is a common issue of misclassification,
the law puts the burden on the employer, they should know better,
Thank you for your assistance. You've given me enough to be better prepare to negotiate with my current, soon to be previous employer.
Thank you for your advise. At this point I think I'd like to consult with a local attorney. Can you refer me to an attorney in Tempe, AZ or in the greater Phoenix area?
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