Being Offered to Sign the "Independent Contractor" Form. Don't Know if I Should. (employee, 2014)

[mussur]

I started working at my college in NY as a graduate student worker when I was doing my master’s degree there back in Fall 2012.

I finished my schoolwork in December 2013 (technically I am not graduated yet but I am not taking any more classes). I was working in my department until end of February 2014, I am not sure what my status was but I was working under the same conditions as when I was a student worker (20 hours per week, same pay, although technically I was not a student anymore). My dept. was going to offer me a full time position but it took them so long that I decided to move to a different city (IL) and they offered me to do some remote work (as a temp worker but under the same conditions, 20 hours per week and same pay) until a full time position was created and then I’d go back to work full time for them.

Today they offered me to sign an “Independent Contractor Agreement” where I would be allowed to work 18 hours per week (down from 20) and get paid the same $ per hour. The only difference they said would be that I’d have to do my own taxes (i.e. they won’t deduct the fed and the state taxes but I’d do it myself the next time I do taxes).

I am not really excited about any of this (doing the taxes, hour reductions and same $ per hour) and not sure what I should be doing. Should I stay as a temp worker or should I sign up as an “Independent Contractor” and what are the differences between them?

I am also an F-1 international student with an EAD (Employment Authorization Document) if that makes any difference.

Thank you!

[fishbrains]

I believe that as an independent contractor you would be a 1099 employee, which would result in you having to pay self employment tax of about 7.65% in addition to all the normal taxes you pay now. Essentially you would be taking a pay cut as the employer shifts that tax burden to you.

I have no idea what impact this may have on your F1 visa.

[MrRational]

Originally Posted by mussur

I finished my schoolwork in December 2013...
My dept. was going to offer me a full time position but...
Today they offered me to sign an “Independent Contractor Agreement” ...

1) Get out of Academia asap.
2) Don't take a contract job. Insist on employee status.

I am also an F-1 international student with an EAD (Employment Authorization Document)

That sounds like an indenture in itself.
Look for STT to answer that part.

[davebarnes]

Ask someone who was born in the USA what the phrase "bend over" means.

[Smooth23]

Correct me if I'm wrong, but doesn't your student visa invalidate when you stop being a student? Perhaps the school knows this and doesn't want to deal with sponsoring a work visa for you(ie, you aren't valuable enough). Either way, sounds like a rip, and if you are done with school you should be seeking a full time job anyhow.

[Phyos]

Originally Posted by mussur

I started working at my college in NY as a graduate student worker when I was doing my master’s degree there back in Fall 2012.

I finished my schoolwork in December 2013 (technically I am not graduated yet but I am not taking any more classes). I was working in my department until end of February 2014, I am not sure what my status was but I was working under the same conditions as when I was a student worker (20 hours per week, same pay, although technically I was not a student anymore). My dept. was going to offer me a full time position but it took them so long that I decided to move to a different city (IL) and they offered me to do some remote work (as a temp worker but under the same conditions, 20 hours per week and same pay) until a full time position was created and then I’d go back to work full time for them.

Today they offered me to sign an “Independent Contractor Agreement” where I would be allowed to work 18 hours per week (down from 20) and get paid the same $ per hour. The only difference they said would be that I’d have to do my own taxes (i.e. they won’t deduct the fed and the state taxes but I’d do it myself the next time I do taxes).

I am not really excited about any of this (doing the taxes, hour reductions and same $ per hour) and not sure what I should be doing. Should I stay as a temp worker or should I sign up as an “Independent Contractor” and what are the differences between them?

I am also an F-1 international student with an EAD (Employment Authorization Document) if that makes any difference.

Thank you!

Yep sounds blatant misclassification - hourly wage, you were previously an employee - going from w2 to 1099 is a red flag as well.

Now if you sign the "I agree I'm a IC" form - legally it's meaningless. It's not a civil agreement, it's a law the IRS puts down.

[MSchemist80]

Most likely employer tax fraud. The IRS has rigorous criteria for someone to be 1099 independent contractor which put simply means you are hired for a project of defined length and scope. These are the criteria they look at. If the answer for more than a few is yes than you need to be w-2.

1. Must comply with the employer’s instructions

2. Receives employer sponsored training

3. Provides services that are an integral part of the business

4. Renders services personally

5. Hires, supervises, and pays assistants for the employer

6. Has a continuing relationship with the employer

7. Must follow set hours of work

8. Works full time for the employer

9. Works on the employer’s premises

10. Performs tasks in an order of sequence set by the employer

11. Must submit oral or written reports

12. Is paid by hour, week, month

13. Is paid for business and/or travelling expenses

14. Is furnished with tools and materials

15. Does not have a significant investment in the service-providing facilities

16. Cannot realize a profit or loss

17. Works for only one employer at a time

18. Does not make services available to the general public

19. Can be fired, and

20. May quit without incurring liability to the employer.