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Tractor Talk Discussion Forum

unemployment

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ricb

02-17-2013 11:31:26




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Last spring we had a kid drive our truck to the quarry to get lime to spread on the fields. Not long after he started(7 to 10 days) he told me he was going to work construction. I thanked him for his help (not sure of hrs.but not many for sure) and paid him & on he went. Recently the unemployment board contacted us & said we were responsible for part of his claim. Ended up we paid $400 to unemployment for a $190 labor bill. Wonder why folks have a hard time finding work I would guess this kind of abuse has something to do with it.

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Pops1532

02-17-2013 20:46:26




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
If the general contractor doesn't have a certificate of insurance on file for every sub, he has to cover them on his policy!

As far as paying UI on yourself...in IL and NY for sure, and probably in most states the owner of a business can opt out of covering themselves. There are some types of businesses where it might be beneficial to cover yourself.

As long as the IRS is collecting income tax, and self employment tax (social security) they don't usually have a problem with the sub contractor thing. The UI people view it differently.
As someone that has worked outside all winter in northern Illinois many times I would fight that judges ruling!!!

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petetherookie

02-17-2013 16:56:21




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
what BS. Feel ur pain. my biz has been incorporated in NYS since '87 and the amount of crap the various state tax authorities have pulled over the years is just pure bull.
Luckily i moved after 9/11, still run biz in NY but dont live there. Currently have some BS assesement against my biz. Let them come up here and try and collect it.
I'll fold the biz before i pay it. Live Free or Die!



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MSD

02-17-2013 16:13:28




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
Way back in the 70's I quit a job. I thought I would draw while looking for another job but my claim was denied. I was penalized for 6 weeks for quitting. After that I could draw as if it was day one again. I'm sure it has changed since then.



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Cole younger

02-17-2013 14:50:29




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
You should have told them he could have his old job back if he takes it give him all the bad jobs you have then when he quits you he"ll collect nothing and if he refuses to work for you they will review his eligibility for benefits. Really doesn"t matter they go back on the previous years quarter remember it"s the government you can"t win.



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Oliver power

02-17-2013 15:26:52




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 Re: unemployment in reply to Cole younger, 02-17-2013 14:50:29  
That doesn't always work either. It was comming into cold wheather. I needed help. Told the judge an ex-employee could come back to work NOW. Judge ruled in favor of the employee. Said it was the wrong time of year to be working out side. I still had to work outside in order to get the job done. Employee was granted unemployment.



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Bryan iniowa

02-17-2013 14:00:31




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
I have had a couple guys try to claim against me . In Iowa you can appeal and request a phone hearing . both guys just never showed up to work . when hearing was scheduled I was on the phone with Unemployment office,,we were waiting for ex employee to get on three way hearing call and he never did.. Told the pfficer ,yep ,,just like when he worked here.lol claim denied!



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Pops1532

02-17-2013 13:35:56




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
David,

What state gives an exemption for fewer than X employees? It's certainly not that way in IL.



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Mike (WA)

02-18-2013 10:28:06




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 Re: unemployment in reply to Pops1532, 02-17-2013 13:35:56  
You're only exempt in Washington if you have ZERO employees.

Was getting tired of all the BS, so when secretary/bookkeeper left in May, I didn't replace her. WooHoo! No withholding, no L&I, no Unemployment.

But the downside is, now I have to do everything myself. Quarterly B&O taxes (business and occupation tax- a tax on your GROSS, not net, earnings). And I forgot to file by end of January for 4th quarter 2012, so now I'll have a penalty. Swell.

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David G

02-17-2013 13:13:39




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
There are strict rules for unemployment.

Contact your state agency.

You are exempt if under X employees.

You should not have to pay anything if he quit you, but you are liable if you laid him off and he was laid off again within a certain period. The agency will go back on all parties.



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Pops1532

02-17-2013 13:10:27




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
Stephen,

Where they can get you is if you had employees prior to the quarter in question you still might have to file your quarterly report showing zero wages paid. If you don't file the reports even though you don't pay out any wages you can sometimes be on the hook for UI taxes or penalties.

I had to file the quarterly reports (according to my accountant) even though I didn't have any employees. After several quarters of reporting zero wages the UI dept called an told me I didn't have to file the quarterly reports anymore unless I started paying wages to employees. I told em to put it in writing. He laughed and said ok. Got the letter shortly after.
Gene,
The OP doesn't owe the former employee. The UI TAX is paid to the state.

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Stephen Newell

02-18-2013 04:58:53




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 Re: unemployment in reply to Pops1532, 02-17-2013 13:10:27  
I did file the quarterly report for the next quarter with 0 wages paid and sent them 6 or 8 letters explaining the situation. I finally gave up and decided I was going to spend more in postage trying to resolving the situation than the tax was. They annually send me a bill which goes straight into the trash. There's nothing more I can do.



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Pops1532

02-18-2013 21:21:26




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 Re: unemployment in reply to Stephen Newell, 02-18-2013 04:58:53  
Quoting Removed, click Modern View to see

I knew a contractor that kept getting billed for back UI contributions. He'd send a check. A few months later he'd get a bill for another quarter. he paid it. Then he'd get another bill. He called and said he'd pay whatever he rightfully owed but he wanted it on one billing so he could get it out of the way. They said ok. They still billed him every few months for different quarters from different years. He called every time and said just send him a final bill so he could get it out of the way. They said ok. Then they kept on like they had been. He finally had enough. He received another bill. He wrote "refused" on the envelope and put it back in the mail. He never got another bill from them.

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Pops1532

02-17-2013 12:59:46




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
IIRC it goes something like this...

To be eligible he USUALLY has to be laid off from his LAST employer (There are some instances where a person can quit and still draw) At that point ALL previous employers within a certain time period are on the hook. You should have already paid the unemployment insurance (tax) on the wages he was paid. The claim only affects your future UI (tax) RATE.
The UI rate depends on YOUR track record as an employer, as well as the type of industry. The more people you've laid off, the higher your UI rate will be. Once you've had a claim it takes a long time for your rate to go down. Where it gets expensive is if you don't pay the UI when you're supposed to.Then they'll hit you with a big penalty. Looks like that's what happened to the OP.

As far as hiring help as contractors and just giving them a 1099.....That MIGHT satisfy the state income tax and IRS folks, but the UI people have a different view of it. In IL, if the person/business issuing the 1099 has the authority to instruct the subcontractor how to do his job, they view him as an employee and not a subcontractor in MANY cases. They use different wording but that's how it is here. For every argument someone comes up with they pretty much have a regulation they can cite showing you're on the hook for the UI and penalties.

Once they've hit you up for back UI taxes and penalties you can expect to hear from them for several years.

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ricb

02-17-2013 14:01:54




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 Re: unemployment in reply to Pops1532, 02-17-2013 12:59:46  
Just a side note we've never laid anyone off or fired anyone for that matter. All books are kept up diligently and have a Ui audit every year as all neighbor dairies have. It's not what we did or didn't do it's the way ui is set up in NY. Also comp ins is sky high as it is for all NY businesses. Why so many have left state in last 20yrs.



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rrlund

02-17-2013 13:09:29




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 Re: unemployment in reply to Pops1532, 02-17-2013 12:59:46  
My son worked as an independent contractor doing construction. He worked for a couple of different contractors,but they required him to go to the County Clerks Office and get a DBA (doing business as) before they would hire him. And he had to have his own liability insurance too. I don't know if that's tax law or not,but they were adamant about it.



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Pops1532

02-17-2013 13:12:09




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 Re: unemployment in reply to rrlund, 02-17-2013 13:09:29  
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Probably more of a liability and workers compensation issue than UI or tax issue.



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rrlund

02-17-2013 13:19:07




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 Re: unemployment in reply to Pops1532, 02-17-2013 13:12:09  
Ya,I would think the workmen's comp as much as anything.
I know another contractor who went entirely to that instead of payroll because they were dealing with the courts too much on issues of child support and what not. The court trying to garnishee wages.



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Spook

02-17-2013 18:57:56




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 Re: unemployment in reply to rrlund, 02-17-2013 13:19:07  
The big reason is that they don't have to pay the 1/2 SS they would have to for employees. The construction industry has gone to a system where they have few employees. Even the the kid sweeping the floor is a "contractor". Really they ought to make this illegal - or really enforce the existing laws. One of my neighbors was building 40 or 50 houses per year. His only employees were his wife and son. And I don't think they wre really working - he just wanted his kin to get bennies. He told me that even his subs didn't have employees, everybody was a "independent contractor". Then he didn't have to carry insurance on them, either. No unemployment insrance to worry about.

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Greg1959

02-17-2013 19:17:37




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 Re: unemployment in reply to Spook, 02-17-2013 18:57:56  
I worked for a construction company like that for a couple of years. First, you went to the office to see where you were going to work for the day. Then each worker drove their own truck to the job site because you had to provide your own tools for anything you needed. We even had to pay for a Porta-Potty if we wanted one on the job site.

Had to pay our own workers comp. and SS withholdings and unemployment insurance (which was silly because--who would want to pay yourself for unemployment?

Staring pay was $10/hr then after the first year you went to $11/hr. The third year took you to $12/hr. and that was where the pay stopped.

It wound up costing me money to work there. Buying my own tools and gas to drive all over the state. No road time pay or paying for a hotel room/food.

This was during the housing boom 2005-2007.

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Gene Stevens Oh-Tx

02-17-2013 12:54:20




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
He quit! You do not owe him anything. Fight it!



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Stephen Newell

02-17-2013 12:50:15




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
It sounds like a scam to me. The unemployment tax on that amount would be less than 10 bucks if it was for real. I would call it contract labor myself so I would trash the bill. If they are anything like the unemployment board in Texas they are all brain dead anyway. They have been trying to bill me for unemployment taxes for a quarter in 2001 I had no employees.



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huntingreen2day2

02-17-2013 12:49:46




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
I am in Tn and had one work 4 hours for me and did not come back the next day. Filed unemployment a few months later when he lost his full time job. They came back on me but there must have been enough in the pool to cover it because I never made any extra payments.



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JayinNY

02-17-2013 12:28:37




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
I think here in NY, you have to work at the same job for a certen number of weeks, forgot how manythan have no work, laid off, to be able to collect unemployment!, I have never collected it, but my brother gets it from me over the winter.



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John in la

02-17-2013 12:22:17




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
Did you with hold the SS out of his check and pay your half of his SS.
If not he should have been considered a contract employee.
Since he made under $600 you did not even need a 1099 form.

Also if you did not treat him as a employee and with hold his SS; unemployment considers him an employee; Now you can wait for the knock on the door from SS.



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Mike (WA)

02-17-2013 12:18:18




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
The bigger issue is that he left voluntarily- here, you have to be fired or laid off to get unemployment.



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John in la

02-17-2013 12:23:30




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 Re: unemployment in reply to Mike (WA), 02-17-2013 12:18:18  
Here you can quit one job; go to a second and get laid off and collect from both of them.



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ricb

02-17-2013 12:42:59




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 Re: unemployment in reply to John in la, 02-17-2013 12:23:30  
All was done legit with withholdings and all. Payroll done by pay hex and watched closely. Turns out you don't have to be laid off to collect. I was always under impression you couldn't quit & collect. Turns out I was wrong.



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Oliver power

02-17-2013 15:15:02




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 Re: unemployment in reply to ricb, 02-17-2013 12:42:59  
Maybe so in the old days of "NYS". I've had many different employee's. They'd work a day or two. Maybe a week or more, etc.. As long as they worked, I had to pay my part of unemployment. During the houseing crisis, you wouldn't believe the claims I had against me. It doesn't matter if an employee quits, gets fired, or is laid off. Yes, they have to have so many weeks of work in order to collect but, it doesn't have to be all from one employer. It can be time added up from many employer's. I think I was being "used" to get the final time needed to qualify. Todays employee's know all the tricks.

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tomNE

02-17-2013 12:12:40




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
which State? anyone who works on my farm is contract labor and gets a 1099 if they make over $600 which i watch closely. if the job is about done, i've been known to pay cash for the last little bit over $600!



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ricb

02-17-2013 12:18:01




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 Re: unemployment in reply to tomNE, 02-17-2013 12:12:40  
Great state of NY. If I would have know what was coming would have paid cash for the work.



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Greg1959

02-17-2013 12:02:33




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
Maybe, next time sign them on as 'contract labor' and give them a 1099 at end of year.



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Adirondack case guy

02-17-2013 15:30:57




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 Re: unemployment in reply to Greg1959, 02-17-2013 12:02:33  
In NY, it thet don't pay their on workmans comp and provide proof of liability insurance YOU the employer are responsible to provide it, even if you 1099 them. I would think the unemployment issue could be contested, but is it worth $400 bucks of agrivation. The system Sucks here in NY. BTDT. as a building contractor. Loren, the Acg.



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DBAF

02-17-2013 11:49:40




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
Wow you paid $190 for 7-10 days I wonder why he found another job?



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Bret4207

02-19-2013 04:20:16




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 Re: unemployment in reply to DBAF, 02-17-2013 11:49:40  
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2 hours here, 3 hours there, an hour today, a couple hours tomorrow. Just how much do you think a know nothing kid is worth?


This post is a fine example of why NY is #49 in the rankings of states best to do business in. Were it me it would be strictly cash under the table.



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ricb

02-17-2013 11:57:29




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 Re: unemployment in reply to DBAF, 02-17-2013 11:49:40  
Was just a part time thing. About 12 hrs total. Not upset about other job just big unemployment bill. The actual bill was $5 per week but duration was 80 weeks.



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JD Seller

02-17-2013 11:40:15




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 Re: unemployment in reply to ricb, 02-17-2013 11:31:26  
I would contest that amount. It is usually a prorated amount base on the time/money he made while working for you.

Here you need a minimum of 17 weeks to draw unemployment. He must have worked the weeks doing construction so that person/company should be the one to foot the largest part of the bill.

Here the rate 6.5% of wages paid. It is base on the average in your work group for a given years. Example they average all farm workers and come up with the rate. So it would have been about $12.35 for unemployment.

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Larry NEIL

02-17-2013 11:49:43




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 Re: unemployment in reply to JD Seller, 02-17-2013 11:40:15  
As JD says that is the case most every state. Contest the amount and I'll bet it is either removed or really lowered.



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ricb

02-17-2013 11:48:27




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 Re: unemployment in reply to JD Seller, 02-17-2013 11:40:15  
That's what we thought and we did contest it and lost in the full amount. It is paid and done....but still feel cheated in a way.



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