Ask HN: Lead dev treated as a regular employee, but filed as a I-1099. Advice? | Hacker News Reader

Ask HN: Lead dev treated as a regular employee, but filed as a I-1099. Advice?

I was the first engineer at a tech startup. My employer treated me as a full-time, permanent employee even though I was I-1099. I filed an IRS form SS-8 this year but was fired before it could be processed by the IRS.

I am wondering if anyone else has been in this exact situation, and if they have any advice to give.

Will I be blackballed for this action, and when asked why I am looking for a new position, what should I say?

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Have been in a similar situation, including filing an SS-8 (IRS took about 3 years to respond to it).

Everyone's always paranoid about getting blackballed when an otherwise successful stint at a startup ends suddenly and badly; I don't get why. Not like you got caught stealing from the company (that doesn't stop people from applying for jobs; it's amazing what resources a true blackballing requires in this day and age).

New employers (in this industry in particular) don't care near as much about how your last job ended as what you accomplished there and what you could accomplish with a new employer.

A victim of wage theft is not any less hireable than someone who's never been a victim. That is, unless, they're so hung up on it that it dominates any conversation a prospective employer has with them.

What should you say? Simply represent yourself as an asset to the hiring company, like any other candidate, because that's what you are. Interviewers are far too absorbed in more relevant matter (like can you code and can you work with others) than the dynamics of your last week at your last job.

If it somehow comes up, give a one-sentence answer and move on. Don't make this unpleasantness the central point of discussion in your future job negotiations and you might be surprised that it never comes up (nor needs to).

You've left out the most important piece of information: Did you negotiate the position as a 1099?

If so, then why are you doing this to them? They held up their end of the bargain, and seemingly more by "treating you as a full time employee". Trying to squeeze benefits out of them after the fact seems like a bad plan. Stick to the terms you agreed to.

If not, then why did you stay more than one pay period? As soon as it was evident that they were not withholding taxes, this would have needed to come to a head before you worked even one more day for them. The fact that it didn't implies that it was in fact that other scenario and now you're just trying to wring extra money out of a company that you had agreed to contract for.

"My employer treated me as a full-time, permanent employee" that may be the case from your perspective, but it still might not meet the legal definition of employment as spelled out in the IRS site. As the initial technical team member, seems reasonable that it could be a temporary role. Especially if you didn't get any benefits. Rule of thumb: if you're 1099, try and get paid a little more to compensate.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employ...

It is very hard to have a full-time permanent contractor not be considered an employee under the IRS. You have to be very strict about your dealings with the contractor and your interaction with them on a day to day basis. Most people get away with 1099ing their contractors.

You will not be blackballed. When you're asked why you're unemployed just say "I filed an SS-8 and they fired me." Any good employer wont care.

Talk to an employment lawyer. If you were fired soon after you filed your SS-8 then it sounds very much like retaliation. The only people who would blackball you (IMHO) are the sort of people who would like to run this sort of scam themselves.

I've not been in this exact situation but your question seems to leave some gaps. Was your firing as part of a retaliation for filing the ss-8 or was it separate? If it was retaliatory you might considered consulting an attorney.

Also, did y have an employment agreement that detailed your status? Being terminated shouldn't prevent the IRS from making a determination of your employment status.

It's unlikely you will be blackballed as employment disputes are not uncommon. That is, unless the pool of employers is very small. If asked why you're looking, be creatively vague. That's usually the best thing regardless of reasons.

Thanks for the response, yes it was retaliatory. I was fired soon after I confronted my employer about the situation.

Look up "the twenty factors"; sometimes they're called "the twenty questions".

The IRS, and California at least but I expect the other states, consider you an employee or a consultant depending on the nature of your relation with your employer or client.

The factors are whether you provided your own equipment at your own expense, whether you were exposed to the financial risk of failure - that is, would you get paid anyway, even if your code didn't work - whether the employer could tell you when to arrive at work and when to live.

To be perfectly clear: neither your contractual relationship, nor on what form your earnings were reported have any bearing in the IRS' decision.

No one factor determines either way, it is the preponderance of the whole being one way or another.

I say you have grounds for an unlawful termination complaint. If you don't have the cash to hire an attorney, you may be able to find one on spec. If you have the kind of attitude I do, you could represent yourself pro per, that is, without any legal advice, or pro se, in which you speak for yourself but with an advisor who does not speak directly to the court.

http://www.powells.com/ has lots of legal texts dirt cheap. http://www.nolo.com/ has very good self-help legal books. Most courthouses have law libraries that are open to the public.

May I, in the most polite, friendly and helpful way, suggest that you write a registered letter, return receipt requested, to the IRS and your state tax board to suggest that your former employer may be guilty of tax evasion.

If the twenty questions come out saying you were an employee, and your employer didn't pay state or federal unemployment insurance, or IRS Form 941 payroll tax withholding, then that could be a felony for which they would do time. This because failing to pay payroll tax, or failure to file the 940 and 941, are regarded as stealing from your own employees.

The simple failure to pay tax is generally not a criminal offense but it is in the case of failing to pay payroll tax.

While I am not an attorney, this is a topic that i am intimately familiar with.

Most of the time, whenever somebody asks a question of the form "Something bad happened to me and it's not my fault. Advice?", the answer is usually "Talk to somebody who knows what they're doing (lawyer, accountant, etc)"

We have smart people on this site. This is not a difficult thing. Even if you could get free legal and tax advice on HN, do you really want to trust some random person on the internet with something important like that?

You won't be blackballed out of your career, but it is possible that by having this burnt bridge, you may have closed yourself off to some opportunities. It'll depend on the demeanor of your former employer, and connections between your former employer and those you're interviewing with.

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