Change from Salary to Contractor

[MI Guy]

What is the name of your state (only U.S. law)? California

My company is closing our West coast office and I was told that my Salary termination date is Nov 30. They want me to switch a contractor position (which would be only for a couple of months and then the contract is over). I am concerned if I do this that I forfeit my right to unemployment insurance afterwards since I will then become a contractor and ineligible. I can't get through to the EDD to ask about this since they don't answer the phone. I'm not sure what to do.What is the name of your state (only U.S. law)?

[pattytx]

I don't disagree with you, I'd be afraid of that as well. Except for the fact that, if you would be doing the same job with basically the same working conditions, you probably wouldn't meet the criteria for IC status anyway and, although it would take longer, the state would probably see through the employer's subterfuge and grant benefits anyway, due to the intentional misclassification.

Commentator?

[commentator]

Yes, eventually the EDD will answer the phone. I suggest that instead of calling the standard numbers you start going through their phone directory, call someone related to wage and hour, tax, technical support services, all those people are up there and can answer your questions.

If you will be doing the same job, at the same place, with the same supervision, them trying to make you into a contractor is illegal, it's a dodge to avoid taxes, unemployment etc. My suggestion is that you say "No thank you. I will just take the lay off slip when my job really ends."

If they protest your claim, and say they offered you other work, you can describe the work you were offered, and it is not going to stop you from drawing unemployment to refuse it because it's not really kosher work. If they asked you to come back and work for them either full or part time,on the payroll, not as a contractor, that would be acceptable, you'd need to do that, but you are not going to be obligated to come back and do the same job as a contractor, because it is not a contract job by its nature.

If you were to take the lay off at the end of November, and then work for them through January, say, you would not be able to receive benefits until you had finished the contract work in January. But I would GO AHEAD AND FILE my claim the first week of December, though you have decided to keep working (as a contractor). You are not going to be able to certify for weeks and receive checks.

But you need to go ahead and get the claim set up before you work any as a contractor (for a non-covered employer). Then when the contract work ends (if they get away with doing this, so to speak) you would then re-open your claim and begin claiming weeks, based on the reason for leaving the job in November. Reason for leaving would always be the reason you left your last covered job. But the company might try to say you "elected to become a private contractor for the company" instead of being laid off, and try to fight your unemployment from that point. I think you can win it, but as I said, I think the whole think stinks, and I'd tell them no thanks!

Be sure and discuss the situation with the claims taker who takes your claim. If they have a clue what they are doing, they will end up telling the employer from the department of labor that what they're doing is not acceptable and that he has to keep you on the payroll with appropriate taxes and benefits if he wants you to continue working.