I have read a couple ads for drivers and they say you will be paid with a 1099 at the end of the year, it is illegal and also you will not have any recourse as a employee for workman's comp if you are injured on the job.
No medicaid or social security withheld is also illegal and to be honest you will need it if you live long enough, if you live in a state that has state unemployment, well you can forget that also.
So, take it as you want but driving for someone that is shady and pulls a 1099 on you is taking advantage and is also breaking state and federal laws.
1099 pay and new drivers
Using an 1099 form is for hiring an "independent contractor" so this could apply to O/O, however if the driver is going to drive the company truck and insured under company insurance than he would be considered a regular employee and cannot use 1099.
IT IS AS LEGAL as can be. YOU as the 1099 contractor, MUST pay your OWN medical, SS, and in some instances, workmans comp.
If a driver is hired by a owner operator as many are under the 1099 the hired driver is a employee, no matter how a company pays a driver they are a employee of the company.
Excerpt from the link:
Evasion of Employment Taxes Carries a Price
Evading employment taxes can have serious consequences for employers and the employees. Employers may be subject to criminal and civil sanctions for willfully failing to pay employment taxes. Employees suffer because they may not qualify for social security, Medicare, or unemployment benefits when employers do not report or pay employment and unemployment taxes. Consequently, taxes withheld and paid by compliant employers are used to pay the refunds and social security benefits of employees whose employers did not pay the withheld taxes.
Anyone that pays a driver on a 1099 is either criminal, stupid, a bad employer or a combination thereof.
1099 is illegal if they are holding you to the exact same standards as they do company drivers when it comes to actions and clothing.
Fed Ex just got burned on this within the last few years.
lots of info here and it provides examples of companies getting burned and the government trying to stop it(mainly because it screws them out of tax cash)
Been there and done that...IRS says if you bring your truck to the job and lease on then you are a contractor...BUT if you are driving their truck and trailer then you are an employee. We were audited several years ago and the guy we were pulling for got into trouble with the IRS for not paying all those taxes and all.
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