thread1088-244883: IRS cracking down on contract employees (warning, pub link)

Our HR got their knickers in a twist recently as well.

As far as I can tell, if the contractor is through a 'job shop' or employment agency I don't see why there is an issue since the 'job shop' is the employer and they are doing payroll taxes etc.

If on the other hand, you are a direct contractor, and get paid directly by "big aerospace inc" there may be an issue.

Might have been better over in "Overcoming Obstacles Getting My Work Done" but this'll probably work.

KENAT,

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There's a push for a similar policy in the Australian automotive industry as well, I'm not exactly sure who is behind it - sometimes it seems to be the union, sometimes it seems to be the employee, sometimes it seems to be the employer (we have the odd situation where you have to value your freedom highly to be a contractor, the pay +bennies is better as a permy, usually).  

Cheers

Greg Locock

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In Canada, the rule is more than one "significant" customer in any 2 year period and you're golden.

Work steady for 2 years for a single employer, and you're an employee- bye-bye to those tax deductions for business use of home, car etc.

For the last couple of years, I've noticed that a lot of corporations here in the US are putting caps on the time that a contract engineer can be on the payroll.  The cap is usually one year.  Not really sure why they're doing that.  As a matter of fact, it can be rather disruptive to projects.

In the US, it's the IRS that is driving this.  Apparently too many people are using this as a loophole to claim expenses, and thereby reduce their taxes, heaven forbid!

Or the employer uses it as an excuse not to pay benefits.

Hg

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the US legal case is Vizcaino vs Microsoft.Its rulings are valid only for the part of the US for which that circuit court sits. Initially all US corporations had tought the ruling would effect all contact employees throughou all of the USA, and at that time many such contract employees woere laid off for at least a 3 month period, to ensure they were not deemed qualified for other benefits( health insurance, vacation, pension, educational benefits).

But that universal layoff policy only lasted one year- there have since been found to be other legal loopholes that employers can use to avoid falling into the Microsoft trap without forcing a 3 month layoff for permatemps.

I amnot a lawyer, but a search of the internet using Vizcaino v Microsoft should yield more leagl inerpretations than a normal person would be interested in reading.

thundair,

It happened here. After the Microsoft suit, the management came up with a date. After that date, contractors that had been here 11 months or more were let go or offered a position.

Since then our contractor are brought on for 11 contracts.

IMHO I think the real issue is you have been there 13 years,why worry, you seem to like the job and if they give you the option of stay or go home I would say just stay.