Company Legitimacy

[Tribegirl]

I recently accepted a position with an import/export business. They have provided me their EIN/IRS documentation, Company data and their state registry. I was told to use my personal credit card for purchases and would be reimbursed through the company account only until my probationary period ended (3 weeks) and then a company card would be provided. I have one purchase that I completed and the company has already allowed me access to the business account to pay off my credit card, which is done; however I'm questioning these practices. Any advice on if I can proceed with this company?

 

[quincy]

I recently accepted a position with an import/export business. They have provided me their EIN/IRS documentation, Company data and their state registry. I was told to use my personal credit card for purchases and would be reimbursed through the company account only until my probationary period ended (3 weeks) and then a company card would be provided. I have one purchase that I completed and the company has already allowed me access to the business account to pay off my credit card, which is done; however I'm questioning these practices. Any advice on if I can proceed with this company?

What is the name of your state?

 

[Tribegirl]

NE. Their home office is in NY. Also, I'm working as a 1099 employee

 

[Zigner]

Screams of scam.

 

[zddoodah]

I'm questioning these practices. Any advice on if I can proceed with this company?

Nothing in your post raises any legal issue.

 

[adjusterjack]

I'm working as a 1099 employee

That's an oxymoron. You're not an employee if you get a 1099.

If you are illegally misclassified as an independent contractor that could also be part of a scam.

Please answer the following questions.

What do you do for this company?
Do you have any professional designations or licenses?
Do you perform these services for others?
Do you bill the company by invoice?
If not, then how are you paid?
Do you have a business name?
Do you use Schedules C (business income and expense) and SE (self-employment tax) on your taxes?

Might not be conclusive but would head us in the right direction.

 

[Zigner]

What legitimate company in the "import/export" business needs random people to buy stuff for them using their own credit card?
The OP made a small purchase and got reimbursed. Soon, the OP will end up making a larger purchase, and the company will be nowhere to be found.

 

[Litigator22]

That's an oxymoron. You're not an employee if you get a 1099.

If you are illegally misclassified as an independent contractor that could also be part of a scam.

Please answer the following questions.

What do you do for this company?
Do you have any professional designations or licenses?
Do you perform these services for others?
Do you bill the company by invoice?
If not, then how are you paid?
Do you have a business name?
Do you use Schedules C (business income and expense) and SE (self-employment tax) on your taxes?

Might not be conclusive but would head us in the right direction.

The OP has expressed uneasiness as to the legitimacy of the business in view of its method of requiring even an "apprentice" worker to front business expenses.

Now if you think that such apprehensions are of greater concern to an employee than to an independent contractor, then there might be some useful purpose in fulfilling your silly laundry list. But I fail to see how doing so can point anyone in any direction but a misleading one.

 

[LdiJ]

NE. Their home office is in NY. Also, I'm working as a 1099 employee

There is no such thing as a 1099 employee. An independent contractor who is in business for themselves can be paid via a 1099 if they meet the criteria, but it is against the law to treat an employee as an independent contractor. That, combined with requiring you to use your own credit card, scream of scam, as another poster put it.

 

[LdiJ]

The OP has expressed uneasiness as to the legitimacy of the business in view of its method of requiring even an "apprentice" worker to front business expenses.

Now if you think that such apprehensions are of greater concern to an employee than to an independent contractor, then there might be some useful purpose in fulfilling your silly laundry list. But I fail to see how doing so can point anyone in any direction but a misleading one.

Are you not familiar with all of the ways that an employee is ripped off by the employer when misclassified as an independent contractor? Are you not familiar with the illegality of doing such?

 

[Taxing Matters]

Any advice on if I can proceed with this company?

Since you indicate you're being treated as an independent contractor (by having your pay reported to the IRS on Form 1099) part of the answer to your question about your options depend on the terms of the contract. Is the contract written? Does it have any restrictions or penalties if you were to stop working for the company now and get a new job? Assuming there isn't any such limitation then your two basic options are to continue working for this company or quit and look for work elsewhere. Nothing in your post indicates the company is doing anything illegal, at least so far, but you've not provided much detail on this arrangement. Having employees pay for things like gas when on the road for company business and then being reimbursed for it later is not unusual. When I worked for the federal government, that's what I had to do when I was out in the field. I kept track of my mileage and then submitted a bunch of paperwork every month to get reimbursed for those travel expenses. Of course, I had the comfort of knowing the federal government was extremely unlikely to stiff me on the reimbursement. If this is a new company you won't have the comfort of a good track record to help you decide what to do.

But if the company is having you pay for things that the company would directly pay for, like buying inventory, etc, that is unusual and that's when I'd be concerned that you might get stuck with a large bill to pay should the company later not reimburse you. Having employees or contractors pay for those kinds of things is a hallmark of either a scam or, more commonly, a badly run company that has cash flow and credit problems. Either way, you'd not want to stay and end up being out a bunch of money. If it's a scam or badly run the business won't be around long. If the business is very new that would make me wary because even if it's not a scam a lot of new businesses fail in the first two years of business. If you weren't paying out your own money for company purchases you could just continue working until either the company closes up shop or you don't get paid and then find a new job. In that situation you wouldn't be out all that much. But if you end up making major purchases for the company, you are taking a lot more risk, risk that you probably shouldn't take if the company isn't compensating you for that extra risk, e.g. giving you a significant portion of ownership.

If the company had been in business for many years with the same management that would suggest that the company is more likely to keep its commitment to reimburse you. Knowing something of the company history may help you determine whether it's legitimate and whether the owners actually know what they are doing.

In the end, you have to make the choice yourself about what you think the company is doing and how comfortable you are staying and putting stuff on your personal card for the business. By the way, you should read your card agreement carefully. It may well be that the agreement prohibits using the card for business purposes (other than the normal reimbursement for employee incurred incidental expenses like gas and meals).

 

[Taxing Matters]

Are you not familiar with all of the ways that an employee is ripped off by the employer when misclassified as an independent contractor? Are you not familiar with the illegality of doing such?

I think Litigator22's point was not that the independent contractor issue isn't important, but rather that the OP's immediate concerns about what the company is asking him/her to do by paying company costs and then getting reimbursed for it is the more significant problem at the moment. If I'm right about that then I agree with where Litigator22 is coming from even though I would have expressed it in a rather different way.

 

[adjusterjack]

I would have expressed it in a rather different way.

You wouldn't have been snotty and dismissive.

That ahole is a legend in his own mind.