Worker's Comp.....

Hmmm, I thought companies who paid on 1099 were trying to avoid matching employee Social Security, also not having to pay into Unemployment fund. Maybe that is not cheating? Hmmm

 

They are not only tax cheats but also are committing insurance fraud! If they pay their drivers on 1099 but do not afford them all the other benefits of being an independent contractor such as non-forced dispatch, the right to have their truck setup and fixed their way, the right to hire someone else to drive for them, etc, then they are not contractors but rather employees. There is no legal 1099 employee, 1099 is for contractors only.

If an employer is not paying on W-2 and paying for workers comp, their share of the payroll taxes, etc, then they are stealing from both their employees and the rest of us employers that actually do things correctly. We end up paying their share into the system while they compete against us with lower overhead, forcing rates downward and reducing profits for everyone involved! Employees are employees because they do not want the risk of owning a business, so why do you think it is fair to push the responsibilities of owning a business off on them? If you are going to do that then they better actually have some risk and reward for what they are doing and should be paid much better than what an average employee would make, but when companies do that the option of paying on 1099 is not nearly as attractive.

Bottom line, paying on 1099 is not an anti-government statement, or a way to stick it to the big government, it is a way for shady and greedy business owners to get out of their responsibilities as employers! It is not a freedom choice for the employee as some have stated, most employees that take a 1099 job have no idea what they are getting into until they either get hurt and find out no one is going to pay for the injury or realize they have to write a big check to the IRS at the end of the year. Going broke for a job doesn't sound like freedom to me.

 

so under the original premise that a $65,000 costs $82,000 at say $.40 on a W2
an employee should get $.50 on a 1099 of course then he wouldnt be an employee would he
and then the driver could be an independent contractor driving a company truck
seems odd to me
I survived 18 months of a Transcam lease not to be in charge of my own life at all anyway
as an employee now I now the perimeters of the job
and the owners responsibilities towards me working that job

 

I have worked on a 1099 before and know companies who pay drivers on a 1099. Most of them pay more to drivers than the drivers would have made on a W2, that would be more than enough for the driver to pay their own taxes. I fail to see how the company is cheating anyone. The driver agrees to be paid on a 1099. If the company pays the driver as agreed, then I don't see the fraud. The driver is not cheated as long as the company pays him as agreed.

 

Even on a 1099, most companies will require workers comp or an occupational accident policy, or should. As far as the rest, you are grossly misinformed about what constitutes an independent contractor. I don't understand why you would care what others do in their business or whether a worker want to work on a 1099 or W2. I have found it difficult enough to run my own business than to try and run everyone else business. I don't understand why anyone would encourage others to turn in people to the IRS. I have made more money working under a 1099 than I would with a W2. I don't know how you could think that just because someone works under a 1099 that they are going broke. People go broke because they don't know how to manage their money. I know a number of people who have worked under a 1099 and none are broke. Most make an above average income.

I have been pretty vocal about having everyone work under a 1099. It should not be the business of the government whether someone is paid on a 1099 or W2. I don't think paying on a 1099 has anything to do with a government protest. It simplifies doing business. How much responsibility does it take for an individual to sit down and write a check? You pay your electric, rent or mortgage. What is so different writing a check for your taxes?

I also never thought that when I was working under a 1099, that anyone was stealing from me. And, it would be quite a stretch to see how a company that pays on a 1099 is stealing from their competitors. If a company pays on a W2, then they will need to take in consideration taxes and benefits, workers comp expenses, etc., when establishing pay. A company can raise driver compensation under a 1099 or lower base pay in order to allow for the additional compensation for taxes, benefits and workers comp. There are only so many dollars to go around. The money will come from somewhere. I have been in business practically all my life. Like most businessmen, I allow a certain percentage of revenue for labor. How that is allocated will depend on the company. However, most of us who have been in business for many years operate much of the same way. You don't get something for nothing.

 

I've never seen that be the case (outside of fleece purchases). Besides, occupational accident insurance is NOT the same as worker's comp. The limits are lower, there is less protection from lawsuits, & there are more ways to exclude a claim (are you "under dispatch" parked at a truck stop sweeping out your trailer and waiting for your next load assignment?)

Of course it simplies doing business. Less time/money spent on accounting. On top of the savings in tax, wc, & employee benefits.

When you don't pay your electricity they turn it off.

When you don't pay your rent you get evicted.

When you don't pay your taxes you may very well get away with it for a while. And that fraud costs other tax payers who have to shoulder the burden (on top of adding the expense of additional IRS agents to enforce the laws). And when you finally get caught you probably won't even be able to pay what you owe and the IRS will settle for pennies on the dollar. Meanwhile our deficit is rising.

I'm not saying 1099'd employees always cheat on their taxes, but it is a whole lot easier & more common for them to "get in trouble with the IRS" than employees on w2...

Most 1099 companies don't even pay the extra 7.65% FICA, let alone enough to cover worker's comp. And because "it simplifies business" there is less time spent/less accounting expenses.

Meanwhile companies playing by the rules are paying those expenses. $800/month for CA worker's comp (vs $130/month for OAI -- if it is even offered). And they are paying 7.65% of the FICA. And they are advertising a legitimate pay rate while their competitors look as though they're paying more (e.g. 38cpm w2 vs 39cpm 1099).

Of course not, which is why I strongly believe people should see what the employer has paid in FICA, WC, etc.

Regardless, employees can't legally be 1099'd. Those not playing by the rules save time & money which unfairly lowers their costs.

 

Workers comp may or may not pay more than an occupational accident policy. Neither will pay 100% of the lost wages. Workers comp is much too expensive and the cost will vary from state to state. I know a driver who had an occupational accident policy. His first day he slipped while stepping on a step deck and fell. He cracked a couple of ribs. His occupational accident policy paid for all the expenses for the fall. Workers comp can be a pain to deal with in some cases. There are different occupational accident policies with different limits. Some pay $1-2 million. I don't know what you are referring to about protections against lawsuits. You can sue anyone for anything these days.

You continue to accuse any company who pays on a 1099 as being dishonest or a tax cheat. In reality, if the taxes are not paid, it is the 1099 worker who is the tax cheat, if taxes are not paid. When an individual agrees to work on a 1099, the immediately accept responsibility for any of their taxes. If they fail to pay their taxes, then that is not the fault or responsibility of the company for whom they contract.

The problem in this country is not with companies who pay on a 1099. The shortfall comes from an administration and congress that cannot control their spending. Taxes are higher than ever. We had 15 taxes which hit this year. Obama and company put off more increases until January and after the mid term elections. Hold on to your seat. You won't like the new, higher taxes. Those are not the fault of companies that pay on a 1099. Let's put responsibility where it belongs, on those who are currently in office and those who voted for them.

If a 1099 worker fails to pay their taxes, you need to put the responsibility on them, not the company. The 1099 worker is NOT a victim. They are a willing participant and have made an agreement which they should honor or suffer the consequences. If a 1099 is not disciplined enough to plan and pay their taxes, then they should never agree to work under a 1099. And, employees do see what their employer pays on all the various taxes, such as FICA, etc., Unless you write the check it doesn't really help them to understand or care. You only care if you are the one writing the check.

 

G/MAN, I will agree the 1099 worker is not a victim, if they understand the deal going in. Where I have a big problem is doing thing legally and correctly in my business costs me more than the companies that shift these costs to their workers. If you are paying on 1099 and still providing workers comp, unemployment (which is impossible to provide to contractors), paying the worker enough to cover the taxes, then your costs will be similar to mine and we are competing fairly.

As for the company being a tax cheat, they are cheating the system if they do not explain to the worker what they are responsible for, maybe some do this correctly but the vast majority do not. Ultimately, if the worker does not pass the IRS employee/contractor test they can not be paid on a 1099, you are violating Federal law. Obviously you are anti government, can't say I blame you, our current system is broken, but we still have to work within the system until it is changed legally. Don't say that I do not understand what a contractor is, I have worked both as a W-2 employee and a contractor, my current situation has me working as a contractor, but a legitimate one as I have several other employees that work for me on W-2's and I am paid on a 1099 from the companies I provide services to as I am not incorporated so they are required to 1099 me at the end of the year. I pass the IRS contractor test, my employees do not so therefore I can not pay them 1099, not that I would because it is not right.

The short answer is, per the IRS, you can not be a contractor without complete control over you services, and usually can not be a contractor without more than one customer. Below is the link to the IRS contractor test which validates my stand on this and clearly defines what the law is on contractor vs. employee.

http://www.irs.gov/Businesses/Small...ependent-Contractor-Self-Employed-or-Employee

 

So on the original topic, is $800/month for a CA driver about average? I know it depends on if a company has a workers comp record but I'd have nada. I'm trying to gather numbers because I want to get my own authority and I plan on hiring a driver or two within the year. Yes, I have experience as a driver and some in the business. gathering a lot of info right now before I go in swimmin