Employment Law Questions? Ask an Employment Lawyer.
Thank you for the information: Your Initial Post:I had an independent contractor from January of 2011 to December of 2011 I send him his 1099 in 2012, now 2013 he contacted me saying he is was not independent contractor for 2011, he wants to contact labor department to complain, does he has a case or could i go to jail for this, he maid $38000.
I maid mistake I did not know the laws for independent contractors, so it was my fault to hire him as contractor.
Response : Determining whether a worker is an employee or an Independent Contractor is fact specific. If the employer controls or dictates how the Independent Contractor works, the Independent Contractor is not an Independent Contractor and is actually an employee. If the Independent Contractor is an employee, the employer must comply with the labor laws by paying payroll taxes, unemployment insurance, worker's compensation, etc. So, if your former employee reports you to the ‘labor department,” you would be ordered to pay all taxes due for that employee. You are not going to go to jail because of this. It is a common mistake employers make by misclassifying their employees as Independent Contractors.
These are the Departments that you need to contact to make sure that you have complied with the labor laws:
(1) Department of the Employment Development Department (EDD). This Department handles employment-related taxes. On the web site, click under "Employers" on the right hand side for more information:
(2) Division of Labor Standards Enforcement (DLSE), handles wage, hour and workers' compensation insurance issues:
Discussion of Independent Contractor versus Employee:
at the moment i am not working can i make partial payment s to labor department/or employee? The buisness is closed since march of 2012. Response: You cannot make any payment to the employee or the labor department at this time. You need to wait and see what the labor department decides. “Labor department” would tell you exactly what you need to do to be in compliance. So, if the former employee wants to report you, tell him to go ahead. Under no circumstances should you pay him extra at this point for him to keep quite. Once you do that, he would keep coming for some more. Let him go ahead and report you. Also and more importantly, if you are no longer in business, then the labor department is limited on what it can do. For instance, it cannot shut you down until you pay because your business no longer exists.
Thank you for the information. Do nothing until you are contacted by the labor department. You would be told what to do by the labor department. I am signing off at this time to attend to other things. If you have further questions, I would get to them, when I get back online later today.
Have a good day,
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