Independent Contractor Terminated and Still Owed Money for Work Done

[Heyitsnic]

I am in Arizona. 3 months ago, I took a job as an Independent Contractor and I did sign a form only stating, “I was responsible for my own taxes and medical benefits.” I was then told after signing the form “I would be needed for about 8 months, work from 8-5 M-F to finish the project, I would receive a check every Monday”, as well as also being told that for “the first few weeks I would be working on an hourly basis, then would change to a per unit pay rate.” After another 2 weeks into the project, I was told, "my pay was changing to the production rate, allowing bonus type incentives, and that I had more flexibility with my schedule." Monday, 2 weeks later when I received my check, I was told that “my pay rate was changing because he could not afford to pay me the money I was making due to the per unit rate.” If the owner’s assistant had not stopped by with the checks that day, I would of had not opened it, looked at the amount, realized that it was off by a good amount of money, and I would of never been notified hat there was going to be a change to my weekly pay. After I addressed the shortage with the owner, he told me “he was wrong to change my pay with out any notice and that I would receive the difference split over the next 5 weeks worth of checks. Then, 3 weeks later on a Monday , I was suppose to receive my check and was told by his assistant that “I was no longer needed, I would be paid the back monies owed, the week I had just worked, and that the check would be in the mail that day.” Needless to say, it wasn’t, I called the owner to follow up with him, at that time I was told “he did not have the money, his customer had not yet paid him and that did not want to write me a bad check, and that he would put the check in the no later than that Friday. Next week came, no check, I then called him again, and at this time I was told, “The Company had not received payment from their customer, and I was told at this point “he would have his money to pay me no later than Friday of that week and he would get it out on that day.” Yet I have yet to receive the check, I have called and left him messages, and I have not received a call back. Can you tell me what steps would need to take to resolve this matter? I am not sure if this would be something that the Dept. of Labor would handle or if I have to sue him in small claims court. I am at a loss here! All I want is the money for the work that I have already done. I know that he still has two other people that have the same job title, perform the same job, and they have already been 3 different times and I have yet to receive my check for work I have already done. Any advice or instruction you can give me is greatly appreciated!
[/FONT]What is the name of your state (only U.S. law)?

 

[outonbail]

When you work as an independent contractor, you are basically in your own business.

This would usually mean that you would provide a written bid on the job you were considering, which would include payment details. If you required being paid weekly for the work you completed, you would then invoice the customer and handle the collection of the invoice like a business. Small claims court would be your legal avenue to force payment for the work you completed. But most businesses wouldn't file a case in small claims until payment was overdue by sixty to ninety days. It is always preferable to work with the customer and come up with a mutually agreed upon payment arrangement or settlement agreement.
Unfortunately, there may also be state license requirements that you would have to abide by, depending on what you were actually doing for this person

However, it sounds like this person was asking you to take the responsibility of an independent contractor so they could avoid the cost of having you on their payroll and have to pay for workman's comp insurance, make tax deductions from your pay etc..
This agreement can work against them and they can still be ruled your employer if the only jobs you were involved in was strictly for them. They can't avoid all liability to the state and labor board by simply declaring you an independent contractor.

But in my opinion, your best course of action would be to try and work with them and avoid going to court. Remain on good terms and maintain an amicable relationship. Do not become threatening and aggressively demanding with them.

They could be telling you the truth and as of yet, haven't been paid themselves.

But once you start threatening them with law suits, they will probably cut off all communication with you and you will be left with no choice but to take them to court.

Then they will be testifying as to your shoddy work and lack of having the proper licensing and you will end up losing the case anyway.

Realize that I'm not in Arizona and haven't researched the state licensing requirements and I don't know the specifics of your situation. Hence, my reply could be useless as far as your independent contracting status.

However, I will stand by the fact that in almost every situation, you are better off working your situation out with your customer, even if you have to settle for less than you believe you're owed, than you would be taking them to court.

 

[ecmst12]

As an IC, your recourse is small claims court.

 

[Heyitsnic]

Question

First I would like to thank you for your time and help! I have an additional question for you.. I have tried to maintain a good relationship with this person.. However, now he will not return my calls or even answer them for that matter. All he has to say at this point is "he has to make sure that the people that he still has out on the job are paid first." I am wondering is there any other recourse such as the labor board, etc. that can help? The work that he is doing is for a Federal Gov. Agency on Indian Reservation land. He did not have us keep any form of time sheets other than the amount of work that we produced for the day and provide this to him on a weekly basis for our pay. Am I basically out the money that he owes me?

 

[justalayman]

I am wondering is there any other recourse such as the labor board, etc. that can help? The work that he is doing is for a Federal Gov. Agency on Indian Reservation land. He did not have us keep any form of time sheets other than the amount of work that we produced for the day and provide this to him on a weekly basis for our pay. Am I basically out the money that he owes me?

the labor board deals with employee (as in not independant contractors) situations. As an IC, you are a company that worked for another company. The labor board does not care.

either sue the man, in small claims court if it will fit or disctrict court if needed or forget about the money. It is as simple as that.

 

[eerelations]

As you were told before, as an IC you are not covered by labor laws - so this "labor board" will not help you.

Sue these people in small claims court. You won't need a lawyer.

 

[ArmyRetCW3]

the labor board deals with employee (as in not independant contractors) situations. As an IC, you are a company that worked for another company. The labor board does not care.

either sue the man, in small claims court if it will fit or disctrict court if needed or forget about the money. It is as simple as that.

That is half true,,,the USDOL make determinations as to the IC status in situations as describe above by the poster. Just because, the employee or the employer states that an IC relationships exists, does not make it so... A determination must be made to establish the applicability or lack there of the IC status...

 

[justalayman]

That is half true,,,the USDOL make determinations as to the IC status in situations as describe above by the poster. Just because, the employee or the employer states that an IC relationships exists, does not make it so... A determination must be made to establish the applicability or lack there of the IC status...

that I understand. I didn't really want to go there. That opens an entire new can o' worms. I simply accepted the OP at their word. I have my own doubts to the status but didn;t want to go there.

Even as such, the DOL still does not deal with the IC's. It only deals with the determination and then if you are an IC, away you go to do what you want.

 

[ArmyRetCW3]

that I understand. I didn't really want to go there. That opens an entire new can o' worms. I simply accepted the OP at their word. I have my own doubts to the status but didn;t want to go there.

Even as such, the DOL still does not deal with the IC's. It only deals with the determination and then if you are an IC, away you go to do what you want.

Keep in mind that the only way to deal with it, is to listen to the claim, and make the proper determination, thru investigative procedures. Just because the employee or employer claims the IC status, that facts must support such application... The Op should contact the nearest US DOL-WHD to find out if the IC is applicable...

 

[outonbail]

This case actually sounds like the employer requested the employees to work as IC's in order to cut costs and/or avoid state tax requirements, labor laws and having to acquire a defined minimum insurance coverage they would ordinarily have to meet in order to employ x number of employees.

If this is indeed the case, then I don't believe the contractor can get away with claiming all these employees are independent contractors. Especially if none of them have ever been self employed and they don't hold the licensing requirements they would have to have in order to operate as a legitimate business.

Hence, I would think that if all other avenues have gone nowhere, then the OP could always threaten to go to the labor board with his case and let them know how this contractor is trying to get around the tax and labor laws by christening everyone an independent contractor. The threat of doing this may get you paid. If not, then it's time to go to court, which it looks as you may end up doing anyway.