How is this 1099 stuff legal?

It's not legal. Well, it's not 99% of the time it's used.
And they are not shut down as when one is caught, the owner just closes the doors and strats another comany under a new name.

 

W2 is what you sign for company employee.

When they shove you the 1099 in a stack of stuff to sign and you are anxious (And hunrgry, motivated revved to get the load and go make money, not very likely to read all the papers you sign.)

Not necessarily you. But the Dept of Labor will have certain work to do once you whistle blow on being a employee on 1099. You stand to get a percentage of whatever that dept investigation uncovers.

 

If I had to guess, I'd estimate about 50% of those paid on a 1099 [and someone else's truck] pass all the criteria tests. And I also would venture to say most of these don't pay any taxes at all.

The IRS should start a bounty program but who's going to effectively turn themselves in and have to come up with 5 years of back taxes?

 

If they dictate any one aspect of your job, then you are W2. I’d venture to say that 99.5% of 1099 companies are illegal.

 

Why would you want to shut that down?

I made lots of money as a 1099 driver when I was single, I didn't want all the insurance and vacation BS I just wanted the most money I could earn.

And when a 1099 gets filed the IRS knows who got paid, it is no easier to evade taxes as a 1099 driver than as a W-2 driver.

I just don't understand the desire to ban or eradicate everything that you personally don't want to do, I fully understand that different grown men have different priorities and needs so why would I want to build a little box that suits me and force everyone else to live in it?

 

But the problem is, a lot of those who want to pay on 1099 are shady and evasive to begin with and probably don't report but a small portion of their actual "contractor 1099 pay". And given a lot of this is literally indentured servitude work, all parties are aware of what's what and aren't too worried about the IRS given the way business is naturally conducted.

I realize this is not always the case, but you will have a hard time convincing me it's not widespread especially in Chicagoland and NJ/NYC areas.

 

Why would you want that to be illegal, just wondering.

 

There must be million of drivers wanting and choosing to be paid on 1099. They would refuse to work on W-2. The prevailing reason is they are in desperation to be paid right away and get as much money on hand as possible. Taxes are are just a nuisance to be worried about later. Catching up with mortgages and bills is what they have to worry about now. Every hundred dollar bill matters. The danger is that without systematic withholding or paying self-employment quarterly taxes, there is often not enough money by April 15th to pay IRS. It is very easy to request back taxes payment arrangement. It takes one phone call to IRS and you can do it year after year after year....almost perpetually. This can add up to over 15K - 20K in back taxes....I don't even know if there is any limit.

 

I've got no problems with "1099 companies" as long as they are not treating their "contractors" as if they were employees, just to dodge a host of taxes and employer issues and regulations.

If they (the drivers) are truly free to work when they want and in the manner they choose, okay.