Question

can an employer deduct wages from you if you are a 1099 independent contractor?

I work for a company for about 2 years now under the 1099 independent contractor. and for two years the "boss" (if there is one since I am an independent contractor) has been deducting about $270.00 every week ... $170.00 if you didn't make any sales that week... I want know can he legally do that and if we are independent contractors are we suppose to have a work schedule? ( he makes us work 6 days a week about 10 - 12 hours a day) I would like some one to let me know what I can do please because up to date he has deducted about $22,880.00 over the two years. but when I receive my 1099 document it states that he paid me all. I would like to kno if there anyway to get all that money back? who do I talk to and what do I do etc... because if I don't do something now its just gonna continue and he has over 100 other independent contractors under his company and they are all being hit the same way , so any info please reply.

4 years ago - 9 answers

Best Answer

Chosen by Asker

check without your approval, except legal garnishments, and they certainly can not deduct taxes - at least in the United States. As independant contractors, you are not really covered, in most cases, by labor laws. You also need to check the agreement you have with your employer, to see if some kind off fees are being legally withheld.

You should contact the labor department in the state you work in, or the federal labor department and ask them if you have some kind of case. Additionally, you might want to contact the IRS, because it may be that this company is not declaring all their income.

It would be great to get more information about the income you have as well as the deductions, so we have a clearer picture of what sounds like a scam.

It does sound like you have some kind of case, though, especially if this is happening to more than 100 people. You may be able to sue to get that money back.

4 years ago

Other Answers

If you are a 1099 independent contractor I do not believe it is legal for your employer to withhold deductions but that may depend on the state you live in. Not sure. But I suggest calling the IRS.

by Z3 - 4 years ago

What are the terms of your contract? That will tell you.

Are you really an independent contractor or are you an employee who is being abused? You sound like the latter because a person you hires an independent contractor can't make them work any particular hours at all.

Considering the number of people involved, you should contact your state labor department or the US Department of Labor Wage & Hour Division and explain what is going on because you may be entitled to overtime. Lots of overtime! You can also file IRS Form SS-8 to get your status clarified.

by Max Hoopla - 4 years ago

you cant be a contractor and collect wages/have a worksite boss. pick one category or the other.
sounds to me like you are not actually a contractor. form ss-8 is your friend; go look at one, and read the IRS instructions/info on its usage.

by wg0z - 4 years ago

Actually it sounds more like legally you're an employee, not an independent contractor. You can file form SS-8 with the IRS and ask for a determination. This could mean you'd end up out of a job.

The best thing you can do is probably look for another job. It sounds like this guy is doing a number of things illegally.

What is he claiming the deductions are for?

by Judy - 4 years ago

Is he deducting Federal Income Tax from your wages? Is he deducting FICA and Medicare Tax from your paycheck? What about State Income Taxes? Are these being deducted?

Does the pay stub that (s)he provides give you any explanation as to what is being deducted? Have you ever asked your employer to explain the deductions?

There are too many variables involved for anyone not connected to you to resolve without additional information.

Last but not least, have you considered speaking to an attorney regarding this situation?

by RUSerious - 4 years ago

For those people who say you are most likely an employee, how would they know? You don't even tell us what job you do.

Let's say you are an independent contractor, so you are the business owner and you have a client. Is the client allowed to dictate your hours = no. Is the client allowed to tell you what hours he wants you to work = yes. Is the client allowed to not hire you, if you are unable/unwilling to work the hours he wants = yes.

You don't even tell us what the reason for the deduction is? Do you even know? Clients are allowed to deduct earnings for many things - some even provide health insurance. So it would depend what the deduction is for and whether it is part of your contract, if he is allowed to deduct this money.

Who do you talk to about this? First. You find out what the deduction is for. Second. You read your contact to see if you agreed to this deduction. Ultimately, if you are really an independent contractor and want your money back you will have to sue him. It's unlikely that you will win because you allowed this to happen. Additionally, it's very unlikely that he will continue to work with you.

My thought is for you to send us another question telling us specifically what you do, so we can help you decide if you are an employee or not. If you are an employee, you would have other rights. My guess is, if he is a large company with 100s independent contractors, he has already done the legwork and knows you are classified legally. No company in their right mind would mis-classify 100s of staff and risk paying penalties.

Source(s)

by Smiling - 4 years ago

it sounds like you really need to get the SS8 from www.irs.gov and complete it, submit to IRS and let them determine your status
what is the $270 being deducted if you are an independent contractor?
my son worked for someone who kept deducting their workmen's comp from their paychecks and I repeatedly told him it was illegal, they finally stopped doing it
as an independent contractor, it means exactly that, INDEPENDENT, you can work when you want, the hours you want etc. that's what independent means

by tro - 4 years ago

If you do not provide your employer with a W-9 form with your social security number or TIN and stating that you are not required by the IRS to have withholding, they are supposed to withhold an amount towards federal taxes (28% "backup withholding" for independent contractors). However, if they just keep the deducted money and do not report it on your 1099, you are being robbed (unless it is for something else, like union dues, medical insurance, etc.).

For example see www.irs.gov/instructions/i1099gi/ar... which is branched off of www.irs.gov/instructions/i1099gi/in...

Note that as an independent contractor, you are not an employee and your pay is NOT wages, it is non-employee compensation.

by efflandt - 4 years ago