My company just told me that they have to switch me to a 1099 for 3 months ‘cause they can’t afford me. They want to do my current salary rate which is below market for my skills and experience. I told them it would probably be higher because I’d be paying the self-employment taxes. How would you handle this? Plus, I don’t know if they will give me 40 hours or 30 hours, or what. I should probably tell them I expect a certain amount of hours per week.

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I would start looking for a new position ASAP.

likesmart

Roger that, J&J

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If they eventually let you go, you can file a claim that you should have been an employee. You'll absolutely win the claim and get all the benefits, withholding and taxes paid back to you, plus a 401(k) match, health insurance. Etc.
Companies can simply change your classification to a contractor if you're doing good the same job and under the same control that you were as an employee. There are employment laws on this.

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Doubt that… but can look into it.

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Any type of contract you should get 15-20% more than your salary requirements as an hourly rate. I am also have way certain they cannot do that legally if you're a full-time W-2 employee, they cannot just change it because they can't afford it.

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HRM1 - and, my W2 contract states that this is an AT WILL employer, meaning, that either of us can change our working relationship as desired. In this case, they desire me to not be a full-time employee. It seems unfair, but I’ve been investigating this.

Rough conversion is IC is 150% of salary rate. Are you getting dropped from your benefits? You need to recoup as much of your total comp (and their overhead) as possible. GL!!

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Thanks Spark!

On 1099 you are contracted for work and they do not set your hours. They will have no say over when you work or how long, how you dress, when you start and end your day. If you have direct deposit that makes you an employee. It’s not an hourly pay situation. And do you lose your ability to contribute to your retirement and do you lose matching? They can’t just change the way they pay you. There’s more to it.

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MM1 - The “more to it” part, I think is that they want to change me to a 1099, so that when they drop me, they don’t have to pay me unemployment compensation. They can just say, I quit and they hired me for temp assignments, then the assignment ended. Being a 1099 means I’m no longer their employee, therefore not entitled to unemployment compensation.

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Please update us when you can.

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Oh man! It is tough out there. I’m glad you were able to negotiate (time to your advantage!) to find something better. Good luck! I’m on the same journey 😆

I wouldn't say anything. Just let them pay you and start looking for a better job ASAP !

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Thanks Todd. I believe this will be the methodology going forward.

I would ask them if you would be able to file for unemployment if they end up cancelling the 1099 work. You probably can but I've been screwed and not gotten unemployment because they said that I didn't qualify for unemployment. Even tho I was laid off.

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OL1 - Employer has all the rights. 😑

I’ve never heard of a company doing this.

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Don’t do that it’ll mess up your taxes you signed a contract don’t sign the new one

likesmart

AE1 - I have filed in the past with 1099 AND W2. Before they hired me full-time, I was a 1099. Now, it’s the same scenario, just in reverse.

Renegotiate your terms since they are adjusting theirs. Your salary needs to be higher to avvount gor your own insurance, benefits and 401k and investments.

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AI1 -Agree with all of this. I suspect they won’t give me the hours to make it worthwhile, but I don’t want to burn any bridges. Plus, they will probably balk at this higher hourly rate.

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I would start looking for a new job.

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Take the 1099 and look, but be careful. I’m turning it down and not having a job. Graphics is a position that can easily be done anywhere in the world. We use a lot of graphics designers out of Pakistan. It saves us a ton of money.

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DofMC1 - and you’re happy with their design rationale on all things creative? Or, do you have to tell them everything to do exactly?

Sounds sketchy. Start looking for another job. They could afford you at one time apparently...so why the change? Sounds like an internal fiscal problem on their end. Go for what your after and deserve.

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