Does my termination violate the notification clause of my contract?
February 25, 2011 11:12 AM Subscribe
I am currently working in the NY area for an employer that hired me a few months ago as an independent contractor. This employer just notified me that my position has been terminated (without cause) due to budgetary reasons, with termination effective in one week. According to my contract, either party is supposed to give 30 days notice prior to termination or resignation. There is no indication within the contract regarding payment in lieu of notice. Do I have any recourse or reasonable expectation of some form of compensation considering that I have been given only one week's notice?
When I initially interviewed, the position was described as a 6-month contract-to-permanent position. It hasn't been six months yet. I never received any prior notice that my contract was ending, nor was I given reason to expect that my contract was even up for discussion yet. Even if this is just the conclusion of the contract, shouldn't I have been informed with sufficient notice if there was no intent to renew? Moreover, considering that I face pending unemployment, my label as an independent contractor seems extremely fishy.
I worked within the editorial section of the web operations division of a global firm. I was hired by a contracting team (this global firm does almost all of its development through contractors), and the conditions of my employment were universal to most of the editorial staff (also hired by the contracting team) . I took the job for lack of any better options - I am not self-employed nor do I specialize in the tasks which I was eventually hired to perform, although I performed them competently and on-time. I worked on a company-provided computer with a generally expected timeframe for work hours alongside strict oversight of my work. This job was my sole source of income. Under IRS guidelines, it seems as if this is a classic case of misclassification, where the company takes advantage of vulnerable job-seekers who are afraid to report it. I am seriously considering reporting this company to the IRS and the NY State Department of Labor, regardless of my employment termination, simply because I don't support tax-dodging and I think this is exploitative behavior.
I already have interviews lined up. However, I do not want to simply walk away and let this company (both the contracting team as well as the global firm) get away with its general incompetence/intentional abuse. Please help me determine the most responsible, legal means of recourse to protect both my interests as well as any future employees who might be vulnerable. On the matter of proper notification, any recommendations for amicable settlement with the company will be appreciated. On the latter issue of employee misclassification, proper procedure recommendations (Form SS-8, etc.) are also welcome. I will likely notify the IRS regarding specifically the contracting company, but I would hope that they are also able to recognize the more general pattern of misclassification at the global firm.
When I initially interviewed, the position was described as a 6-month contract-to-permanent position. It hasn't been six months yet. I never received any prior notice that my contract was ending, nor was I given reason to expect that my contract was even up for discussion yet. Even if this is just the conclusion of the contract, shouldn't I have been informed with sufficient notice if there was no intent to renew? Moreover, considering that I face pending unemployment, my label as an independent contractor seems extremely fishy.
I worked within the editorial section of the web operations division of a global firm. I was hired by a contracting team (this global firm does almost all of its development through contractors), and the conditions of my employment were universal to most of the editorial staff (also hired by the contracting team) . I took the job for lack of any better options - I am not self-employed nor do I specialize in the tasks which I was eventually hired to perform, although I performed them competently and on-time. I worked on a company-provided computer with a generally expected timeframe for work hours alongside strict oversight of my work. This job was my sole source of income. Under IRS guidelines, it seems as if this is a classic case of misclassification, where the company takes advantage of vulnerable job-seekers who are afraid to report it. I am seriously considering reporting this company to the IRS and the NY State Department of Labor, regardless of my employment termination, simply because I don't support tax-dodging and I think this is exploitative behavior.
I already have interviews lined up. However, I do not want to simply walk away and let this company (both the contracting team as well as the global firm) get away with its general incompetence/intentional abuse. Please help me determine the most responsible, legal means of recourse to protect both my interests as well as any future employees who might be vulnerable. On the matter of proper notification, any recommendations for amicable settlement with the company will be appreciated. On the latter issue of employee misclassification, proper procedure recommendations (Form SS-8, etc.) are also welcome. I will likely notify the IRS regarding specifically the contracting company, but I would hope that they are also able to recognize the more general pattern of misclassification at the global firm.
You probably do have recourse, but only a qualified employment lawyer in your jurisdiction will be able to tell you how much. Talk to one.
posted by Aizkolari at 11:37 AM on February 25, 2011 [1 favorite]
posted by Aizkolari at 11:37 AM on February 25, 2011 [1 favorite]
Wait a sec... Did you get a pay check made out to you from the company? did it include any deductions for state or Federal taxes? Did it deduct FICA? Did it deduct Medicaire? If it did then you are not an independent contractor, you are a W2 employee with a contract. In either case if the contract does stipulate 30 days notice I would write them up a bill for the remainder of the 30 days and present it to them asap.
posted by Gungho at 11:44 AM on February 25, 2011 [3 favorites]
posted by Gungho at 11:44 AM on February 25, 2011 [3 favorites]
Response by poster: To clarify, my paycheck has no deductions. Essentially, I shoulder the burden for all relevant taxes. They don't pay unemployment insurance (and I don't qualify for unemployment after this job ends). It's a sweet system for them - no taxes, no need to provide benefits - but it's also clearly an abuse of the term "independent contractor."
posted by whitedoor at 11:59 AM on February 25, 2011
posted by whitedoor at 11:59 AM on February 25, 2011
Honestly, I don't think your interests are best-served by pursuing any action in this matter.
posted by Houstonian at 12:02 PM on February 25, 2011
posted by Houstonian at 12:02 PM on February 25, 2011
Get a free consult with an employment lawyer or three and bring the contract and your story.
posted by rhizome at 12:09 PM on February 25, 2011
posted by rhizome at 12:09 PM on February 25, 2011
definitely speak to an employment attorney. your initial consultation should be free and depending on what the attorney says, you can then determine whether this is something you wish to pursue.
posted by violetk at 2:45 AM on February 26, 2011
posted by violetk at 2:45 AM on February 26, 2011
I used to work in HR for a company that had handfulls of both employees and Independent Contractors.
You are thinking about this incorrectly. You're an IC. You don't work for them, you work for your self. They contracted with you to do a job; probably paying you by the hour or by the project. They are contractually obligated to give you 30 days notice of voiding the contract, they are not obligated to give you such notice just to tell you to stop working. It sounds like they have given you 7 days notice regarding stopping work and three weeks notice that the contract will be voided.
I don't think you have a leg to stand on regarding any sort of payment. You can cause them some trouble by contacting the tax authorities but it probably will just be a headache for them, rather than any real penalty. As I recall, the city/state tax authority cared about this issue much more than the feds because the city/state made money off of taxing businesses by the number of employees they had. ICs didn't count. We were forced to move a few ICs to employee status and had to pay a little more down the road on business taxes, but there wasn't any sort of punishment for the misidentification of their status.
For what it's worth, you're not really an IC. I mean by the contract you are, but the tax authority would agree with you and me, that you're not really one. You don't have business cards, you probably didn't provide your own computer or tools or whatever. You probably had to come to work to do the job, etc... If you find yourself in this position again, you should expect/demand to make twice as much for the job as an employee would make doing the same thing. You're not getting benefits, you don't have the job security, you are supposed to provide your own equipment, you don't have taxes withheld, you are doing them a favor, etc.
posted by pwb503 at 9:33 AM on February 27, 2011
You are thinking about this incorrectly. You're an IC. You don't work for them, you work for your self. They contracted with you to do a job; probably paying you by the hour or by the project. They are contractually obligated to give you 30 days notice of voiding the contract, they are not obligated to give you such notice just to tell you to stop working. It sounds like they have given you 7 days notice regarding stopping work and three weeks notice that the contract will be voided.
I don't think you have a leg to stand on regarding any sort of payment. You can cause them some trouble by contacting the tax authorities but it probably will just be a headache for them, rather than any real penalty. As I recall, the city/state tax authority cared about this issue much more than the feds because the city/state made money off of taxing businesses by the number of employees they had. ICs didn't count. We were forced to move a few ICs to employee status and had to pay a little more down the road on business taxes, but there wasn't any sort of punishment for the misidentification of their status.
For what it's worth, you're not really an IC. I mean by the contract you are, but the tax authority would agree with you and me, that you're not really one. You don't have business cards, you probably didn't provide your own computer or tools or whatever. You probably had to come to work to do the job, etc... If you find yourself in this position again, you should expect/demand to make twice as much for the job as an employee would make doing the same thing. You're not getting benefits, you don't have the job security, you are supposed to provide your own equipment, you don't have taxes withheld, you are doing them a favor, etc.
posted by pwb503 at 9:33 AM on February 27, 2011
Response by poster: Lesson learned re: independent contracting. It's a function of the weak labor market that I didn't feel comfortable demanding those terms when I first took the job, but I figure it can't hurt to just call the local labor board and file the right form with the IRS now that the job is over. Anyone else looking for the correct authorities to contact can find it at the website of the NY State Department of Labor.
posted by whitedoor at 3:55 PM on February 27, 2011
posted by whitedoor at 3:55 PM on February 27, 2011
This thread is closed to new comments.
posted by notsnot at 11:28 AM on February 25, 2011 [2 favorites]