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Dwayne B.
Dwayne B., Lawyer
Category: Employment Law
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Experience:  Employment Law Expert
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There is a huge dog walking company that offers services in

Customer Question

There is a huge dog walking company that offers services in several cities. (Mainly California and New York.) It has an app people use to hire dog walkers. All of the dog walkers are 'certified' by the company. (Let's say the name of the business was 'Paws', the website would say all dog walkers are 'Paws Trained and Certified'. The dog walkers make a certain rate per walk. They are treated as Independent Contractors. How is a big company like this able to treat all of their workers as Independent Contractors? They don't have their own businesses.
Submitted: 8 months ago.
Category: Employment Law
Expert:  Dwayne B. replied 8 months ago.
Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Also, I can only answer the questions you specifically ask and based on the facts that you give so please be sure that you ask the questions you want to ask and provide all necessary facts. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms. First, it may be that they just haven't been challenged on the issue yet and that once they are the workers will no longer be independent contractors and the company will owe a ton in fines, compensation, etc. That happens all the time. There was a case just recently where an internet company lost on this issue and is now having to pay a fortune. Second, generally the right of control is what determines whether someone is an independent contractor or an employee. The more control someone has over a worker then the more likely that worker is an employee and not a contractor. If the company doesn't set hours or other restrictions then they are likely within the law. The company can require that the workers met certain criteria but as long as they aren't setting hours and supervising the work then the workers probably are contractors.The IRS has a good web page explaining the issue and the possible penalties at https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee
Customer: replied 8 months ago.
Hi Dwayne, thanks for your answer. I had a contractor quit with no notice and filed with the TX Workforce commission for unemployment...and in asking questions about it I wound up calling a federal investigator of Labor Law...he told me that all IC's have to have their own business, and be short time work. My IC's don't actually have their own businesses, but some of them work for other pet sitting businesses. I don't set hours for them. I forward them emails from clients asking for service and they either choose to take it or not. I do have people that have stayed with me for years, though. I do train the ones who are new to dog walking. I also pay for pet cpr and first aide if they don't have it. I ask them all if they have their own supplies and if not, they can borrow mine (some have their own leashes). I do require they double leash dogs for safety. I have software they check in and out of, that creates their pay sheets (for years they would all invoice me, but they found that time consuming and complained about it). They send a visit report out through the software we use that goes to each client. I'm just sweating because I don't want this disgruntled worker (who is upset I didn't pay her for taking a day off) to report me for something. I'm not trying to get away with anything illegal. The only reason I've done IC's instead of employees (and to be honest, although more expensive, I'd rather do employees to exert more control) is because of the overnight house/pet sitting we do. Clients are typically charged $75 per night (12 hour shift). Arrive around 8pm leave at 8am. If I treated them as employees, even by paying the minimum wage, it would come out to a very high number- something clients wouldn't pay. (I pay my workers $40-$50 per night.) If they were employees at minimum wage (which, I wouldn't want to pay them minimum wage, I'd want to pay higher) but using minimum wage as an example, 12hours x$7.25 is $94.25. The going rate for the house/pet overnights in Houston is $70-$90 a night. And 100% of it would go to the worker... I don't make a lot of money from the overnights, but I know my sitters love them, but if I had to treat them as employees, I'd have to stop offering this service.
I'm freaking out because I don't want this person to report me and be found of something criminal, when I do so much for them. I even gave her $200 to help her with moving expenses..I think she came to expect extras. (She did hint the day before she quit that she needed money to open up a 'Cat Cafe' and I didn't offer her money for that...I don't know if that upset her or what, but I feel she could do a lot of damage for something I didn't realize I was doing wrong. She not only wants me to pay her for a full day of work the day she took off, she is wanting to be paid in full for the last day she worked. (I called her, emailed her, texted her that day and didn't get a response. She didn't show up to a client meeting she had scheduled either.) I didn't get a response till the end of the day from her that she quit. And she wants to be paid for that day. I just have this sinking feeling that this one person could make me out to be doing something wrong, and could be very costly.
I pay my taxes, and 1099 everyone, but still have this feeling this one person- who up until a couple weeks ago, was happy.One other thing. in her email to me saying she quit, she put to mail her her last check. Hand to God, I didn't see that part (I was so shocked). I left it at my home office for her to pick up, as she has for the last 2 years. (Yesterday was payday.) I got an email from her that she was upset as she didn't get her check in the mail. She said that she sent me a certified letter saying she wanted it mailed to her. (I didn't get a certified letter...but that doesn't mean she didn't send it; our mail system is less than to be desired. Last summer I got a slip saying I had certified mail, and when I went to the post office, they couldn't find it). She emailed me her bank account number and said I must direct deposit it into her bank today. I went today to do that and they said since her signature wasn't on the back, they would have to place a 7 day hold. Hopefully, this won't be my fault. I'm running around like crazy, understaffed and in a huge bind as I have to cover her (she was doing office managing) and correct accounting errors she caused...it's a mess to sort out.One more piece of information. I had her sign a contract as an IC at the end of September that was a 90 day probationary period, with possibility of a raise after that time. She had made accounting errors and turned away clients, so I didn't do the raise. We didn't sign an extension of anything. She wanted to keep working- but she worked from home and kind of did her own hours.
Again, it all stemmed from me investigating whether or not I would have to pay her unemployment....
Thanks for your help.
Expert:  Dwayne B. replied 8 months ago.
No, the investigator is incorrect on those points under the law. A person isn't required to work as a contractor only on a short term basis. Many contractors work that way for their entire career. Looking at your situation it would appear it is ripe for a contractor relationship. The ability to reject clients, lack of supervision, and you not setting the hours are the usual things you look for in determining whether it is an independent contractor vs an employee. If she tried to get unemployment then you should hire a lawyer and let them handle it. Usually that's not necessary but you don't want to get pulled into an argument about her status without someone on your side who can argue the law correctly.
Customer: replied 8 months ago.
One more follow-up.
The worker who quit did it via email. Pay day was Thursday. I left the check at my home office, where she has picked up checks for over the last two years. I noticed she didn't get it, and that evening, she sent an email saying that in the email she had sent me the day she quit, she said to mail her the last check. (I didn't see that part of the email...I went back and looked, it was there, I had just overlooked it.) She also told me she sent a certified letter asking it be mailed to her. I never got a certified letter, though.
In her email Thursday evening, she said she wanted me to direct deposit the money into her bank and gave me the account number. I went into the bank on Friday (yesterday) and gave them her check and told them I wanted to direct deposit it. They took the check, looked at it, and said it needs her signature. I said 'can I sign it for her?' and they said 'no'. They said since no signature, that the check would be held for 7 days. Well, that's about the same time it would take if I waited till Monday to send it (since she won't come pick it up). I emailed her last night that I deposited the check in her account, and have the deposit slip. I told her if she wanted a copy of the deposit slip, I could send it to her. I also said that the bank said they'd have to place a hold on the check since her signature wasn't on it.
I got an email response back today. She said what happened is unacceptable, and I should have done it electronically. (I didn't know she meant electronically, and in the past I tried to do a direct deposit with someone and it didn't work.) She said I must cancel my check, and send her the money electronically, or else she will 'go after me'.
Pay day was the 7th. Her check at my stairs, and dated the 7th. The deposit slip is dated on the 8th. Can I get into trouble because the check is on a hold? If she would have just picked it up, or called me when she noticed that I didn't sign for any certified mail, this all could have been avoided.
I just don't want any trouble, and want to be done with all this. Thanks-
Customer: replied 8 months ago.
...One more note, I had put in my email she may want to call the bank and go in and sign it. I'm guessing her going into sign the check wasn't an option. I feel I did things in good faith. Again, I just want this to be over without any more trouble.
She has already filed with the TX workforce commission for unemployment. And wants to be paid for a sick day she took (we didn't have an agreement to pay for days off, and wants to be paid for the day she quit (although she missed a meeting, didn't return calls or texts or emails that day, and apparently did no work that last day). Thanks
Expert:  Dwayne B. replied 8 months ago.
You shouldn't get into trouble since the check was available on the date and at the same place as usual. The delay was due to her wanting you to change procedures so you should be fine. If you do pay her for the extra time then you should consider having a local lawyer draft a release for her to sign. The release can be worded generally and in such a way that it also releases you from any claims made for unemployment. If your question has been answered then I'd offer my best wishes to you and ask that you please not forget to leave a Positive Rating so I receive credit for my work. Of course, please feel free to ask any follow up questions in this thread.