1099 contract when I was told I'd be w2, how do I navigate this?
March 7, 2014 6:23 AM Subscribe
On Tuesday I drove across country to start a new role in the Bay Area. Prior to this I was working on a year-long contract which wasn't renewed. During the interview process I was looking for a full time role, but was convinced that this was a good opportunity, particularly to get my foot in the door back in the Bay Area where I'm originally from and still have family. During the interview I was asked specifically what type of contracting I would be open to and said that I was only interested in W2ing to a new role rather than becoming an independent contractor and billing, and I stated that I wasn't interested in 1099ing. The rate I provided reflected this as well. Turns out I've been onboarded as a 1099 and the rate that I was looking for as a W2.
posted by anonymous to Law & Government (33 answers total) 5 users marked this as a favorite
Upon further reflection, the company is interesting and while I'm not thrilled to be a 1099 contractor, I could at least consider it for the next half a year or so, perhaps longer, depending on how things go. I was and still am very excited to be back in the bay area and while I'm crashing on my dad's couch currently, have plans to have my girlfriend fly out soon and start apartment hunting as well. However I've never been a independent contract before and had no intention of starting. I did make this clear in the interview when asked, or at least I thought I did, but now having met my boss he's certainly the type of person who a) is a bit scatterbrained and I wouldn't be surprised if that fact wasn't retained and b) was a 1099 employee himself for many years and certainly doesn't seem opposed to that approach to employment and even wasn't sure that he had ever paid payroll taxes as a contractor.
A big concern is that I'm now losing an extra part of my pay check to payroll taxes and income taxes as well. My current rate is $50 an hour, which was what I was making before, but as a W2 employee through a contracting company. Now that I'm 1099 employee I'm making about 15k less than I thought I was which given my understanding of the Bay Area rental market isn't exactly thrilling.
I was noticeably a bit perturbed when this came to light and my new boss asked me if that was ok. I said that this was a fair bit of new information and I'd have to get back to him. My thought it to go in tomorrow, talk about getting on a W2 contracting agreement or that I'd have to raise my rate. This is only my third job since college though and I'm a bit nervous on how to approach this, if I should even try (and instead try and take the best of a bad situation and start looking again instead now that I'm actually in the area) and the language that's best used to approach this.
This was a very quick transition as well, I received the offer last Monday and was driving out that Friday to arrive this Monday, so given the very quick timeschedule and all the rest of the tight logistics I figured that the rest of the paperwork would have taken place on my first day. It didn't, but took some time to set up (through oDesk, which I had thought was going to be the company I was contracting through but turns out to be a way for freelancers to log their hours and get paid).
This is all made confusing to me as I was provided with a laptop, a company phone and a number of other services through this new company, facts which I thought indicated that at the very least I was somebody's employee.
Long story short, I'm less than thrilled, certainly it makes the offer to speak with my former boss who's now out here a fair bit more enticing.
New info too, in briefly discussing this with my father he said that he's been self employed most of his life and that 1099's actually pay less taxes like FICA and social security so I'm really not certain what's what right now. I had thought that 1099 was more expensive that way but maybe I'm wrong? Clearly I'm unprepared for this and that adds to my sense of unease.