Q: Can a company, like a cleaning company, that hires you to work as a 1099 contractor compel you to start an LLC?
After not paying a dime for 4 months worth of work completed and not telling us why, we were told that they would not pay us until we started an LLC
You are entitled to compensation for the hours worked regardless of whether you agree to open an LLC. Your employer is trying to misclassify you to avoid paying you employee benefits. Make sure you keep all correspondence about this subject in writing between you and your employer.
I suggest you consult an employment law attorney who will further examine your situation and explain your options. Most employment law attorneys in California offer free of charge initial consultations and thereafter may take your case on a contingency basis, meaning you do not have to pay attorney’s fees unless and until there is a positive outcome for you. They may also advance either all or partial costs of litigation.
You can look either on this site in the Find a Lawyer section or go to California Employment Lawyers Association (www.cela.org), an organization whose members are committed to representing employees’ rights. Best of luck.
Maya L. Serkova
A: One obviously can't be compelled to start an LLC. However, AB5 has made companies careful regarding who or what they pay for contract work. The business-to-business exception or exemption is probably what many companies seek to avail themselves by contracting only with LLCs. Of course, more information is needed. Speak with a local attorney about your specific situation. [I litigate cases. Anything posted here must not be construed as legal advice, nor as grounds for forming an attorney-client relationship. You should seek an attorney for formal legal advice and representation.]
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