Q: I'm on 1099, but I'm just an employee. The owner offered to change to w2, but at a reduced rate of pay. Is this legal?
A: Misclassifying employees as 1099 independent contractors is a common tactic used by employers to avoid various expenses, including taxes, unemployment and workers's compensation costs and overtime compensation. Changing you to a W2 is not illegal, nor is reducing your pay. The real question is whether you were not paid for all time worked, including overtime compensation, when you were misclassified as 1099. That would potentially not be legal.
Tim Akpinar and Bruce Alexander Minnick agree with this answer
1 user found this answer helpful
A: Unless your employer was mis-classifying you for unlawful reasons the only practical difference when changing you to a W-2 employee is that the employer must match your FICA contributions (7.65% of your gross pay), and in some cases must start paying certain state employment taxes. Sounds like the employer is offsetting those new expenses by lowering your salary or wages. Not illegal.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
