Independent Contractor Option

Today TaxMama hears from Dianne in California with this question. “I am a contracted bookkeeper for a non-profit group in CA.

One of my contractors has accepted employment with the same organization in a position that is typically paid through payroll, but wants to continue to be paid using the 1099 method. Is this going to cause a problem for the employer? It is already causing problems among the employees.”

Dear Dianne,

How charming of this fellow to think it’s his option! It’s not.

This is a job – not a freelance contract. He’s on payroll. Period.

If he wants to work badly enough, he’ll accept the position on those terms.

Your organization may want to be soft-hearted and give in to him. What will happen?

When and if he gets laid off, or gets ill or disabled, he will file a claim with California’s EDD.
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He will say he was an employee. EDD will review the case. They will agree. They will access back taxes, penalties and interest. They will assess those charges all the way back to the day he was employed.

And this will happen. It always happens. Really it does. He’s an employee. If he balks, cheerfully remind him how many other people are unemployed and just waiting for a shot at that position.

After all, he already knows he’s disrupting the workplace and it doesn’t bother him.
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What does that say about him?

And remember, you can find answers to all kinds of questions employment issues and other tax issues, free. Where? Where else? At

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