Contact UsI work for a construction company, a large portion of our "employees" are paid cash and taxes are not taken out. Now that the year is almost over the company owner wants to 1099 all the workers who are paid cash. In every way these workers are employees... the owner tells them when to work, where to work and what the do while they are at work. These workers have no idea that this is the plan and are completely unprepared for this to happen, is it even an option for the owner to do this?
If an owner of a company at anytime can decide that employees are independent contractors then wouldn't all companies do this to avoid paying employee taxes? I understand if the owner wishes to 1099 these workers for 2014 but I do not think it is fair to spring this on them in the last month of the year.
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Tax Professional Answers
Dean Marzullo
They can go to the state labor board or whatever the agency is named that handles employee issues such as wages and request a classification to determine if they, indeed, are employees.
If they are determined to be employees, then the employer has to remit the social security and medicare portion that he is responsible for, on the wages that were paid. The employees are responsible for their portion. In essence, he has to issue them a W-2.
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500 weeks ago
If they are determined to be employees, then the employer has to remit the social security and medicare portion that he is responsible for, on the wages that were paid. The employees are responsible for their portion. In essence, he has to issue them a W-2.