Temp job question

[dbunny]

So I've had something nagging at me for a while now, but I never knew where to go for advice.

I was in a pickle a couple years ago after I graduated college and suddenly found myself rushing to get a job. I sent my resume to over 30 companies and one final offered an interview. I went in to interview and it was all good, they were offering decent pay although it was hourly work. However, they kept promising that the first permanent position that became available would be mine 'for sure'.

I guess the promise of a permanent full time position distracted me from the fact that the job had no benefits. It was a 'contract' job, I guess it's kind of like a temp job, but this wasn't explained to me in detail. I worked hourly, received no vacation or sick time (if I needed a day off it was unpaid), no unemployment benefits, no health insurance. Basically nothing but my hourly pay. I also had to sign contracts every 3 months that basically said I have no benefits and either party can terminate employment at any time without warning.

It seemed fine to me until I did my taxes. The tax pro said it seemed kind of off that they could get away with it. Was it legal to do this? To me it just seemed like a regular hourly position, but a lot of people I talked to told me it was strange. I don't work there anymore but I want to avoid this in the future and understand what's right and what's not.

(By the way, a full time permanent position became available and they didn't consider me. Makes me glad I quit because they were just full of lies.)

Does anyone know where you go if you are concerned about how you are being paid and if everything is legit?

[pksr]

This is a hot area right now. Apparently many companies blur the line between employees and contractors.

Fedex in particular has been in the news quite a bit, and you can read about their story here http://www.businessweek.com/articles/2014-10-16/fedex-ground-says-its-drivers-arent-employees-dot-the-courts-will-decide

For advice, start by googling "employee versus contractor". I unfortunately don't know of a step between that and hiring a lawyer specializing in employment law, but those are the two ends of the spectrum for more information.

The good news is that Fedex (and others) are making a lot of companies focus on this area and make sure they aren't using folks who are employees in everything but name.

[Numbers Man]

I think that sucks what companies are doing to young people. You may have been an employee but wasn't treated like an employee. Read this and decide for yourself. It never hurts to talk to a labor attorney if you really want to stick it to them.

http://art.mt.gov/artists/IRS_20pt_Checklist_%20Independent_Contractor.pdf

[dbunny]

Wow. I didn't realize this was such a big deal.

My coworkers said they did this frequently to avoid future layoffs, however at the time I was the only one hired on 'contract'.

Thank you for your advice. I'm definitely going to look into this more.

[jjcamembert]

If you signed a contractor agreement then I think it sounds legal (not necessarily fair or nice, but legal ;) ). On your side, when you do your taxes you can file as self-employed / independent contractor and get those deductions.

I've been given the option before on contract jobs: I could be "employed" by them and receive benefits, leave, and holidays, or I could be a contractor and handle those details myself. Generally as a contractor you want to get paid more so that you can cover those additional expenses.

[cdiggs]

Misclassification of workers is what you are asking about.  I'm not sure what state you worked in, but if you're interested in learning whether or not what they did is right or wrong, then contact the Department of Labor for your state (here's the listing for all labor offices by state).

For example, the NY Labor Office provides a toll-free number to report misclassification of workers and has this to say on the topic:

"Misclassification occurs if an employer treats people as independent contractors when they are employees. Some employers use this tactic to avoid compliance with:

    Unemployment insurance (UI)
    Workers' Compensation
    Social Security
    Tax withholding
    Temporary disability
    Minimum wage and overtime laws that protect workers

When you pay workers off the books, it is fraud. It deprives workers of the protections they deserve.

These practices also put law-abiding business at a competitive disadvantage, because they incur expenses for UI and Workers' Compensation for their employees."

[TerriM]

If you signed a contractor agreement then I think it sounds legal (not necessarily fair or nice, but legal ;) ). On your side, when you do your taxes you can file as self-employed / independent contractor and get those deductions.

I've been given the option before on contract jobs: I could be "employed" by them and receive benefits, leave, and holidays, or I could be a contractor and handle those details myself. Generally as a contractor you want to get paid more so that you can cover those additional expenses.

It sounds like they were not doing the right thing if you were working on-site full-time just like any other employee.

That said, the above post is correct--being self-employed should come with the appropriate adjustments.  If you are in this situation again:

1.  You should be paid extra because you're covering your own vacation, retirement, health insurance, and you're paying self-employment tax.

2.  You should be paid for all hours of overtime.  It's not a salaried job.  Also, you have a right to set a price on overtime.  You're in control as a self-employed person, and all things are negotiable.

3.  In general, you have more leeway in refusing projects (of course, they can say "good-bye", but they had reserved the right to say that anyways).

4.  You should be able to work for other people during this period except perhaps competitors.


In the past, you could buy group-priced health-insurance through the local small business group and get a tax deduction for it.

[iamadummy]

if you ever do it again, just make sure you contract hourly rate is much higher than an employee rate.

[dbunny]

So I looked into it further, it turns out I was technically a temporary employee who received no benefits (that's what the contract I signed said). I worked there for well over a year and then I left to go back to school (I was really frustrated with my situation there so going to get my master's degree was a way to get out of the situation).

I'm in school now and the university offers legal consultations at really low prices ($10 for advice on any legal matter). I think I'm going to look into it to make sure I'm not owed anything from them and to understand the laws better so it doesn't happen again.

Thank you for all of your suggestions. This made me realize that it was more of a serious matter than I understood at the time.

[Thomasj1]

dbunny,

It's good to hear you went back to school and it seems like you've figured it out. Did you eventually figure out if they owed you anything or not?

We're doing a piece on how college graduates often get tricked as they're offered something significantly worse than they should be getting. Would you mind, if I contacted you?

Regards,
Thomas
Webmaster @ http://contractorquotes.us/

[dbunny]

So I had a final meeting with the lawyer and here is what I learned:

-I am too late to file a wage claim. At least in my state, you have 180 days to file a claim if you think you are owed some sort of compensation.
-The way I was hired was legal at first, but became illegal after 12 months. In my state, a temporary employee is one that works no longer than 12 consecutive months. I passed that by about 4 months.
-I was supposed to be getting sick pay and vacation time after my probation period. That never happened and it screwed me out of a few day's worth of pay.

I can file just to get them caught, but I live in a small town and I plan to work in this community after I graduate, so although it's illegal for them to discuss information like this, they aren't above telling people about it. So I don't want a bad reputation. I will try to find a way to anonymously submit information about their behavior, but I'm just going to let it go after that.

The biggest thing I have learned from this is: If you think an employer is trying to pull the wool over your eyes, they probably are. Look into it as soon as possible.

Thomasj1, I will contact you if you still think this is interesting, just let me know in the comments.