Do they need to go to court?

February 1, 2013 3:52 PM

A colleague may have hired an illegal immigrant to work for her. This employee will not sign a W9 form. What is there to do?

I'm asking for a colleague, (M), who hired someone, (E), to do some part-time work for her. E claimed that she was a graduate and is on OPP status to work in the states. M began paying E last year, but now needs to file taxes and needs E's SS# to issue a W9 form. Not only will E not fill out the W9 form, she has gone so far as to threaten M. M is witholding the final payment until E completes the W9.

So my question is three-fold. How is M liable for not having the W9 form signed before she made payments? And what can M do if a W9 form isn't obtained? What type of lawyer (if needed) would help in this situation?

posted by jadegenie to law & government (11 answers total)

Your friend should see an employment lawyer. Also, there's a high likelihood that withholding payment is illegal (it would be in my jurisdiction).
posted by MoonOrb at 4:08 PM on February 1 [7 favorites]

Your friend M needs a lawyer.

she has gone so far as to threaten M.

And maybe the police (depending on the nature of the threat).
posted by headnsouth at 4:19 PM on February 1 [1 favorite]

You're supposed to get the W-9 when the person starts working for you, not a while later when it's time to file taxes. At this point the horse has left the barn and the chickens have come home to roost, so to speak. Your friend has two choices: pay the person under the table, or talk to her attorney.
posted by alms at 4:23 PM on February 1 [3 favorites]

Here's the thing: withholding her money is probably illegal. But not paying applicable taxes on her income is definitely illegal. So there's a real catch-22 going on here.

This person needs to consult an employment attorney immediately. The costs of screwing this up (more than it already is) far exceed what he'll spend in attorney fees.
posted by valkyryn at 4:41 PM on February 1

she has gone so far as to threaten M.

I don't see how this person is in a position to make any threats (unless, I suppose they're immediat and physical). After getting in touch with a lawyer, I'd suggest M let ICE know about the suspected status of this person.
posted by blaneyphoto at 4:48 PM on February 1 [2 favorites]

I'd suggest M let ICE know about the suspected status of this person.

Absolutely do not do this without asking a lawyer first if this is a good idea.
posted by MoonOrb at 4:51 PM on February 1 [2 favorites]

Absolutely do not do this without asking a lawyer first if this is a good idea.
posted by MoonOrb

You DID see the part where I said, "After getting in touch with a lawyer", right?
posted by blaneyphoto at 4:53 PM on February 1 [3 favorites]

w.r.t. dodging the W-9: It is also very possible that E was expecting to be paid "under the table," and is trying to avoid having to pay tax on the earnings. For a self-employed person, there is a massive difference between being paid "under the table" and reporting all income.

As a normal employee, your employer pays social security and medicare taxes in addition to the ones that you pay out of your paycheck.

As a self-employed person, I have to pay both sides of that, more or less, in the form of a "self-employment tax" that covers the portion of SS and Medicare taxes that an employer would have paid on my behalf. And still also pay all the same taxes that you do. Worse, since it isn't automatically all deducted from my paycheck, I have to be very careful to make sure that I'm actually setting aside all that cash to send in as estimated tax payments.

So if someone thinks they're being paid under the table, and suddenly an employer asks for a W-9, there's a great chance that they've failed to set aside the monies to pay the taxes.

I won't bore you with a discussion of backup withholding. However, I will point you at http://www.irs.gov/uac/Frequently-Asked-Questions-about-Backup-Withholding
posted by jgreco at 5:04 PM on February 1 [2 favorites]

A colleague may have hired an illegal immigrant to work for her.

In thinking about it, it's just as likely that the employee is simply trying to evade her taxes. Undocumented immigrants aren't the only people who don't like W-9s.
posted by valkyryn at 7:06 PM on February 1

You DID see the part where I said, "After getting in touch with a lawyer", right?

Yes, but it wasn't clear from your post that the OP should consult an attorney about whether it's a good idea to report the worker to ICE or not. I thought a reading of your post was (1) consult an attorney and (2) afterwards, report the worker to ICE--which I took to mean independent of whatever the attorney said, which wasn't necessarily even concerning whether it would be a good idea to report the worker. Since reporting the worker to ICE could significantly make a bad situation even worse, I thought it was worth mentioning. My apologies if I misread your post.
posted by MoonOrb at 2:58 AM on February 2

Thanks for all the responses. I'm forwarding this thread to M along with that backup-withholding site. Ask Mefi is awesome!
posted by jadegenie at 7:12 PM on February 2