Worker's Comp.....

Ok I see that... it's just he mentioned the stuff that's being taken from the employees paycheck. That is on the pay stub. His matching contributions are not.

 

The point I'm making to you is those matching contributions not spelled out on the pay stub are a cost born by every employee. See post #15. That's an employer covering $17,000 above what comes out of the employee's paycheck. The employee makes $65,000 gross a year but could make $75,000 or $80,000. What I'm saying is the employer does not pay anything. They figure that as a cost of doing business. Part of your wages. But you never see any of that money. You are paying it regardless what rules are on the book saying employers pay it. That's just smoke and mirrors. Babysitters, bureaucrats, and do gooders cost you wages. The flip side of that without social security most people would have nothing if they wanted to retire. But for responsible people they bear the burden for the irresponsible.

 

And that's the reason some pay on a 1099, so they don't have that cost. Of course they say it's to help the driver out with taxes but you never see them offer to pay all the extra cost that they would have to the driver. Always seems to be the same gross pay as a w-2 job.

 

I don't think that paying on a 1099 is just about saving the cost of the matching contribution for companies. It takes time to do all the calculations and paperwork when you pay the workers taxes for them. That is the main difference in being paid on a 1099 and a w2. It is who writes the check. Those who are paid on a 1099 could actually benefit more in lower taxes than those who are paid on a w2. If I worked for someone else I would much rather be paid on a 1099. If you are responsible it is better for the worker than a w2.

 

If there is nothing wrong with paying a company employee as a 1099 you had better call the US Supreme Court and Fed Ex and tell them the court made a mistake, I sure Fed Ex would appreciate your help.

 

I believe the case you mentioned was in California. The FedEx contractors were not employee's, but the communist run California district court decided to make up their own rules. Whether someone works on a 1099 or W2 should be a decision made between the worker and the company. It should not involve the government. The only reason the government has gotten involved is because some who work on a 1099 don't pay their taxes. The government wants to force companies to confiscate the workers pay so that they can make sure they get their pound of flesh. I recall reading something about this case. I think it was pushed by the unions and a few FedEx drivers who probably got caught for not paying their taxes. Most of the time these cases are pushed by those who didn't pay their taxes and when caught tried to place the blame on the company. Unfortunately, all too often, the government sides with the workers because they know they stand a better chance collecting from the company than an irresponsible worker.

 

But are those paying 1099 passing on any part of those savings? I don't think so.

 

Most drivers I have met who work on a 1099 do make more than if they were paid on a 1099. You seem to be under the impression that everyone who is in business should "share" the profits with contractors or workers. When a company if forced to pay more for workers, such as their taxes or other benefits, then there is less money to pay them. It is basic economics. When I worked on a 1099 myself, I ALWAYS made more money than when I have worked on a W2. When taxes are taken from your paycheck and given to the IRS, you are giving the government an interest free loan. When you get a check from the IRS they are giving you part of your own money back that they have used interest free for the previous year.

 

Not talking about taxes. I'm talking about how those who pay on a 1099 always seem to pay the same gross amount to a driver. So they are only doing it to lower their cost.

I think i know a little about drivers and payroll.

 

I have been on both sides of this issue. Sometimes, companies may wind up paying the same. But, it costs extra money in payroll or time to calculate the deductions each week since most will not earn exactly the same each week. Some companies pay the workers more due to the worker having to pay the additional social security contribution. This is what I have experienced talking to those on both sides of this issue, drivers and companies. Paying on a 1099 is much cleaner and simpler for the company, but not everyone is disciplined enough to save so they can pay their taxes. That is why many prefer the money be taken from them and paid by their employee rather than to be responsible for paying it themselves. This is an issue some of us have debated for some time and will probably never agree.