Independent Contractor vs. Employee HELP!

[GaussianBlur]

I'm a wedding video editor and have been at the same wedding video company for 10+ years. They shoot the weddings and employees of the company also edit them as well, so the job roles are interchangeable for the most part.

I originally got the job in 2004. They held a contest for the job and contestants had to make a 3 minute highlight video. I won first place and got the "job". They made me sign a contract saying I had to give them 40 hours give or take per week and not work for other video studios in a 30 mile radius of the company. I was required to go into their basement (home business) but they said I can show up and leave whenever since I was an IC. But I still had to show up and use their stuff. I was paid hourly.

In early 2005 the owner of the company went to a seminar for weddings videographers. Upon returning he said "you can work at home and it's now paid by the project and not hourly". He then asked that I still stop in a few times a week. He set the pay rates for the projects.

Thing is from about 2005-2006 the work wasn't enough to pay the bills. I went from a $600 weekly hourly pay to doing about 2-3 $200-600 jobs a month that would often get held up over clients not getting back to them. So I started shooting weddings and editing for other studios but it was literally like 5-6 gigs. He found out and verbally yelled at me for working for others, I explained the cash flow/client delay problem and he pretty much blew that off. So I still tried to find work to fill in the gaps but now was afraid to respond to job offers online (there's a wedding video forum etc and they're very tight knit so everyone knows everyone, even across country). So it's' easy to find out if someone starts working somewhere else etc.

While he doesn't fire me, I did get plenty of verbal and email complaints and threatening messages about not showing up enough to his basement frequently enough during this time period, 2005-06. They had another contract editor who started there in 2003 that showed up at his place of business every day 9-5 using his stuff and you could say he was the sr. editor there. In 2006 the other editor pretty much had it and quit so I was now the primary editor and they started charging more money and luckily I was getting paid more. I was still afraid to work for someone else but since I no longer had the need to, I just played it safe and stuck with this company.

In 2006 I bought a Steadicam device and asked on a wedding forum about tips on how to use it. The owner of the studio called up and yelled at me for posting that saying "it made him and his studio look bad", since they knew I worked for him and he was a steadicam guy.

In 2007 I got an offer to edit ONE (LITERALLY ONE SINGLE PROJECT) from another videographer that was a corporate video, not a wedding video. The studio I worked for wrote this videographer a letter saying that I couldn't do the project without risking my job.

Slightly later on in 2007, he asks me to do a video where I talk about editing so they can show it at a demonstration. He said "I want to get your name out there" like it was an exposure opportunity. I found that odd that he wanted my name "out there" since earlier, he threatened me. I'm pretty sure that his real intent was to give other videographers the impression I was an employee so they wouldn't offer me any work (this is a national convention in vegas the demonstration was in. For the record, wedding editors do a lot of work by mail across the country).

Late 2008 he started actually hiring employees that in effect did the same job I did except they were in the studio. He did a staff page which included me and other workers, without any indication of them being an employee or contractor...this is important because in 2011 they get audited for 1099s for the year of 2009

For the 2011 audit, he took down all contractors from his staff page and erased them, like they never existed. He asks me for a business card to show the auditor. I don't have any given 2007's letter. I just had a website with my work on it. He admitted to me via email that he was going to just forge my card and admitted to taking down contractors off the site for the audit. I eventually learn he passes the audit and I get put back on the staff page. For the record, he said the audit, which took place in 2011, was for the year 2009. During that year, the recession, I was out of work with them for about a month since they had no work..needless to say, I had no outside work aside from them for 2009.

At the beginning of 2011 he says something along the lines of "Hey I have 2 employees now, but I still rely on you for your speed"...he was holding back something, I can tell from the tone of his voice and it was very weird. The wedding edits take about a workweek give or take to make, and I generally churned out at least 3 per month and was the most prolific of any editor. For most of 2011 he complains that I haven't been as productive. I then start getting verbally questioned by one of the employees, who's a family member of theirs, about stuff I'm working on outside (I did a lot of promo videos and charity work because I wanted out of that place). The employee starts saying "Oh no wonder you slowed down, in a hassling tone, like he was prodding me on behalf of the studio etc. I can't know that for sure, but it just seemed odd and he was getting pissy with me as 2011 went on with similar questions and comments.

At the end of 2011, they accused me of overcharging them for shooting (he does have IC use invoices). For years, he said shooting rates were $40hr for shooting gigs USING THEIR GEAR. (I had gear of my own but he didn't like the brand of camera so I had to use his gear from about 2010-2012). He then said no no, $40 hr with your own gear was the rate, the rate without gear was less (yet he didn't specify that lesser number). I had MANY emails where he had in writing that the rate was $40hr WITHOUT gear of my own...to which he blew off and insists that "it isn't fair to my employees that I pay them $40 with gear and you $40 without)...despite the fact I had like 5 years plus experience and seniority over most of them. He later agrees to let it go after I said I'd stop shooting there.

During 2012, most employees LEFT. He starts hiring contractors only instead.

In 2013/2014, he starts putting in more control towards contractors. They now have to contact the client (bride and groom) and ID themselves as "with" the company. He also insists that contractors now log hours...for flat rated projects. Other contract editors are going in his studio and working at his place using their computers, although not on a schedule, but pretty much every time I visit there's several ICs there.

Recently I responded to someone's post on Facebook looking for an editor, he then emails me on Facebook "Why are you looking for work? Are we not paying you enough, you have a backlog with us"...The reason I was looking for work was because one of their employees said they were running low on jobs...he then interrogated that employee and that employee had to "rephrase" what he said. That same employee referred me to a friend of his that needed editing done (like 2-3 jobs per year) and he's terrified he did that and said we'd have to keep it a secret.

Meetings and Language used - he doesn't mandate meetings, but always barked and yelled at me for not being a team player. Usually he would wait for me to drop off a project and just call the meeting right then and there so I was "forced but not verbally forced" to attend. He always referred to me as an employee-he told clients I was an employee and had me edit his kid's mitzvah for dirt cheap because "we've been employing you for all these years"...which I kind of felt was a threat the way it was phrased.

Contests: The contest I won in 2004 was again labeled and advertised as an actual job. This studio has held several more contests just like the one I was originally hired in over the years SWITCHING back and forth between IC and employee. 2007s contest was for a contractor, 2009-11 being employees, and 2014 being a contractor.

On a Facebook wedding video forum he advertised the 2014 hiring contest as a "contractor job" for a new editor. Late in 2014 someone posted an article about FedEx being slammed for contractor fraud and wedding video studio owners were getting paranoid. The owner of the studio that I work for said that everyone was fine. Then other wedding studios replied saying: "No you cannot tell a self employed person that they can't work for other studios via contract" - such as the one I originally signed. Another studio said "Even if you don't control them, if they make more than $30K per year and it's their main salary over a long period of time, your IC are in fact employees". The guy that runs the studio I work for DELETED HIS POSTS in that thread and EDITED the 2014 contest entry saying "contractor job" and deleted the word "contractor". Kind of like he got scared.

Freelance:: He "allows" me to do freelance stuff...but he isn't too happy about it - again as noted, I get harassed if I don't turn in jobs frequently enough since I worked there. But I only do a handful - i.e. like 3-5 gigs per year.

Even though I work from home and make my own hrs (which I now am supposed to log) and do freelance, I have been harassed for working with other people, have been with them for 10 years as a permanent editor, and have the same duties as their employees, I'm integral to their business, and I have to communicate with the other employees on a routine basis. I roughly make about $30K per year with them give or take some years with only a few grand for other jobs, if that.

Any insight of guesses would be appreciated...

[tallen]

Sure sounds to me like, for the most part, you should have been considered an employee over the 10 years. He seems to have become a little more savvy about the rules around this over time. But still, as an independent contractor you should be free to take on other clients without harassment (so long as doing so doesn't interfere with your performance of your contract with any of your existing clients).

For more information, you might start here: Independent Contractor (Self-Employed) or Employee? (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee)

The IRS and the State governments both take mis-classificaton of employees as contractors quite seriously. You could file a form SS-8 with the IRS to seek their determination as to whether you should be treated as an employee or as a contractor. Your State may also have a process for making such a determination -- you could check with the State Department of Labor (unemployment insurance); State Revenue Service (income tax withholding); and/or the Worker's Compensation Board (worker's comp insurance).

But my question would be, what is it that you want to have happen? Do you want this guy to take you on as an employee instead of as a contractor? Do you want him to stop harassing you so you can take on additional work? Do you want him to pay you more? Do you want to put him out of business?

[Freelancier]

From your perspective, it doesn't matter whether you're an employee or a contractor. Here's why: the determination for this is made by the IRS and state Dept of Labor after an audit of the employer's records. Someone has to blow the whistle. OK, so how does that change your life? It means the employer would have to pay back taxes on half the tax money you paid, you'd have to re-file a bunch of your past tax returns to claim that money and in the end, the employer will stop using you. So how did that turn out? See what I mean by it doesn't matter? You do it, you get a little money back for a bunch of effort and then you lose your work stream. Turning in the employer is the kind of thing you do when you want to work for someone else.

From the employer's perspective: he should be scared. Yes, he's been trying to treat you like an employee. But you've also been letting him overstep his bounds as a contractor. If you're just on contract, you get to control everything about what you do, except for the quality and quantity of work done for the contracting company. You're an independent vendor and operate independently. If you need to use their equipment for your tasks, that's fine, but only if you don't have similar equipment available to you. The contracting company can't mandate it. If you're an employee, then it's however many hours you both agree that you're going to work and the employer controls all the conditions, but also has to provide all the equipment to do your job. From an operations perspective, you've been letting this happen to you without standing up for your business because you haven't been clear that you're an independent actor in this drama.

And maybe that's what you need to do here: establish your own business. Get other clients. Tell this one client that if they want a dedicated monthly block of hours to pay for them up-front, but that you do them when you want as long as you get to the deadline he needs with the quality of work he needs. Set boundaries on his interactions with you. You've gone 10 years without doing this, it's something you need to start doing NOW.

I recommend setting up an LLC, treating it as a separate entity from you, and telling him that all work going forward is between his company and the LLC, that you'll still be doing the work, but that you're making your independent status apparent for all to see and that going forward you're a vendor to his business until one of you decides differently. If he tries to question your working for others, you end that discussion because it's overstepping the boundary you need to establish with him. Just say, "I'm sorry, I'm not at liberty to discuss any other clients my company might be servicing, just as you would not like it if I discussed the clients I service for you with anyone else."

The benefit to you other than clarifying your role for everyone (including yourself) is that it's almost always a terrible thing for a company to get most of its revenue from one source. So it'll force you to find other clients to make sure that if you lose this one client you continue to have a stream of income to support yourself.

[GaussianBlur]

But my question would be, what is it that you want to have happen? Do you want this guy to take you on as an employee instead of as a contractor? Do you want him to stop harassing you so you can take on additional work? Do you want him to pay you more? Do you want to put him out of business?

Pretty much 1. Get a new job - which can be difficult as a lot of corporate video firms shun wedding videographers and/or have him become less a PITA to edit for - My main beef over the past ten years is that the projects get delayed, called back, etc, which then eats up time I could be working on something else, but he'll give me a hard time over that.

A lot of job interviews and getting apartments with landlords, when I put my job down on my resume, it always confused them, and I wondered why until it clicked...I had put down contract editor at "anonymous video" a few times in the past and that's obviously an oxy-moron to people who know better when they see "contract job with one company" etc.

I'm pretty want it clarified just for peace of mind as well. It's an expensive company and the pay per job is higher but the clients are head cases often and take months to get back to you etc...that and a lot of new hires lead to his edits taking longer than it should (fixing too much footage when a lower priced videographer gets it right). What ticks me off is I sucked it up since it was a more prestigious video place and expensive one, but the few times I've talked to other wedding videographers, and did a handful of jobs in secret, even though the flat rate was a small portion, I'd make a bit more cash per hour because it was a much more smoother experience, despite them charging a lot less etc. Half the pay isn't bad if it gets done in a third of the time.

[tallen]

Freelancier is right, you've been seeing yourself as an employee, and playing into this guy's hand, rather than setting yourself up as the independent self-employed business person that you could be. Which gets back to my question, what is it that you want to have happen?

[GaussianBlur]

Freelancier is right, you've been seeing yourself as an employee, and playing into this guy's hand, rather than setting yourself up as the independent self-employed business person that you could be. Which gets back to my question, what is it that you want to have happen?

Right now I plan on confronting him about it, as I'm currently in an argument right now with him because the "others" are more compliant etc. But I'm just doing more research to back up the confrontation to set these boundaries. A little over a week ago I asked to set my own pay scale and terms to gage a reaction IN WRITING, to which he told me to return all jobs/hard drives I had of his and meet up with another contractor editor of his downtown who would bring them back. I said "I can bring it up myself". He then emailed "So and So will be bringing them back, please meet up with them today". Which I initially took as a "get lost" reply. I wound up taking back the hard drives myself since it was that person's birthday and didn't want to bother him. When I took back the hard drives he asked if I wanted to talk, but I told him to email me since I wanted his reaction in writing. He walked away...then I'd say about a week later he emailed asking for an in person meeting...to which I replied "in writing please". He then just emailed back a list of complaints about me refusing to do things that the other employees / contractors do etc - I have successfully chipped away at the control parts, but apparently not enough because it seems now he's spoiled by the other employees / pseudo contractors.

But again what I want to have happen is to be able to confront him about this from a position of strength so I can get him to stop hassling me and so I can get a better workflow out of him while I get a better job / clients.

As far as playing into the mentality of an employee - yep I see that now, but it was hard to come to that conclusion. I didn't get really suspicious that I may fall into this category until 2011. It was on the back of my mind before that point but I didn't think I'd fit the criteria until 2011 when it became clear he was trying to hide something. I didn't quite realize the "it's not a voluntary agreement, it's the IRS says what it is" type of deal until recently.

I looked up LLCs but they didn't seem like right terms for an individual at the time...that and I'm pretty much a 1 man band. He actually stopped using a contractor that did that back around 2011, though I'm not sure if it's the LLC thing, but he did moan and groan that person for doing that and said "I'm not using him anymore, he's a contractor doing his own thing" or something to that effect.

[Freelancier]

But again what I want to have happen is to be able to confront him about this from a position of strengthYou don't have a "position of strength" and you're kidding yourself if you think you do. You've given him all the power by acting like his employee and getting it back isn't going to happen by researching whether you should have been classified as an employee or contractor. Stop now. What you've set out as your goal for this confrontation you're formulating in your head is ridiculously weak and plays right into the way he's been playing you for 10 years. Stop now.

Ignoring this whole thing... where do you see yourself in 1 and 3 years as far as your work? Is it to be someone's employee? To have your own business? What is it you want for you? If you start to answer and mention this guy, then you need to start over and try again. Your goals need to be about you, not about him.

[GaussianBlur]

You don't have a "position of strength" and you're kidding yourself if you think you do. You've given him all the power by acting like his employee and getting it back isn't going to happen by researching whether you should have been classified as an employee or contractor. Stop now. What you've set out as your goal for this confrontation you're formulating in your head is ridiculously weak and plays right into the way he's been playing you for 10 years. Stop now.

Ignoring this whole thing... where do you see yourself in 1 and 3 years as far as your work? Is it to be someone's employee? To have your own business? What is it you want for you? If you start to answer and mention this guy, then you need to start over and try again. Your goals need to be about you, not about him.

Goal wise is to get this settled...yes I do want closure on it. I don't think it's right that he takes jobs away from people who actually follow the law. I'm just going to tell him no, doesn't work for me and just start calling contacts and go elsewhere.

On a side note, would you guys say this is a "Sequence of events/Reports" in SS-8 Questions 14-15?

583

The company's response when I took issue with some things in there (since it holds up workflow) was:

"However, the big picture is all the other accommodations we have made for you that we don't extend to any other editor. We have standards we have developed and everyone else seems to follow them. But as you know, your right as a subcontractor is to turn down the jobs based on our standards."

[Adel Landman Steyn]

Labour legislation really varies across countries, so this may not be entirely applicable to you.

Usually, the technical distinction is control.
Although some restraints can still apply to contractors, (e.g. quality work output, deadlines, restraints of trade and so forth) contractors are usually not subject to the other party's internal procedures. Basically, as long as the work gets done to a satisfactory standard, it is the contractors business of how they get it done.


What I don't get is why the employee / independent contractor distinction would give you any negotiating power in this situation.

Do you want to threaten to report him to the revenue authorities? Would that really make a difference in your jurisdiction? Here, "personal service providers" who are contractors for the purposes of the Basic Conditions of Employment Act, but who derive more than 80% of their income from a single source, are subject to employees tax anyway. So, the employee / contractor distinction would make no difference. Unemployment Insurance depends on the amount of hours you work per week here - if it is more than a certain number per week, they have to register you, regardless of whether you are an employee or a contractor.

It doesn't seem like he is planning to fire you. If he did that, the distinction between contractor and employee would actually mean something, because contractors do not have protection in terms of unfair dismissal, while employees do.

To be honest, it sounds like you are grasping at (irrelevant) straws, unless there is something I don't know about your legal system.

[GaussianBlur]

Just spoke with a few co-workers and just learned this companies 'employees' who were passed off as in-house 9-5ers were in fact 1099'ed despite being in-house, using their gear, so they never stopped doing "in house 1099ers" like I thought. Now eventually a decent chunk of them became W2'ed, but the strategy of the company was to keep them on 1099s as a "trial period" as long as they could. Several people there had to beg and twist their arm to become W2 because they were promised employee-ship after a few months, but some had to wait as much a year to become W2 despite having official titles like "studio manager" "editor" etc and listed on their site as an employee.

I read the IRS isn't generally as suspicious when you convert someone from 1099 to employee, whereas going from employee to 1099 is highly suspicious to the IRS. This company seems to be abusing this fact.

Most places have a "trial or training rate" for employees where the pay is lower, but they are W2'ed from the start...not 1099ing IN HOUSE people for 6months to a year and trying to delay the w2.