Can a company that hires independent contractors hold payment owed to them? I am asking for a friend of mine. Her husband is an IC for a carpet installer. They are holding, I think, two weeks of his pay. He then asked for a $30.00 loan out of that money that is his and the contractor said he would but at a 30% interest rate. But the money he wants to borrow is his. Can the contractor do this? Any information is appreciated. They really need their money.
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Independent Contractor
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Well, technically, until they pay it to him, it's not his money he wants to borrow - it's their money. They can lend it to him if they want, and he can borrow it if he wants - although 30% interest rate is borders on usury (that is, criminally high interest rates), IMHO, and he might want to check the local usury laws.
What are they holding the pay for? What does the contract say about holdback? And where is this occurring?
What are they holding the pay for? What does the contract say about holdback? And where is this occurring?
I am thankful you answered. No reason to hold his pay. They just are. I don't believe there is a contract, he is a subcontractor for a carpet installer and we live in Pittsburgh, PA. Any advise is appreciated. They live paycheck to paycheck.
Patricia_Young
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I'm skeptical that he even meets the criteria for an IC.
http://www.irs.gov/taxtopics/tc762.html
http://www.irs.gov/taxtopics/tc762.html
CharlesEvans
New Member
Even independent contractors have written contracts. He can use this against the person who availed his service.
theretoo
New Member
he has a contract, or the company he works for has a contract and wages would be outlined in the contract or at least payment to the contractor would be, wages are the direct responsibility of who writes the checks to your husband. example, in my field of employment, were i still employed, i wrote the contracts with terms and conditions of the contractors that we used. this would include payment terms. if we hired a contractor to do a job, then there might be a stipultion in the contract, that the contractor receives 50 percent upfront for the job and the balance at the end of the job.
who writes his paycheck to him, that is who holds the contract. if he works for an employer who has a contract with company xyz to do a job and they get paid 50 percent upfront and 50 percent upon completion, then the company that holds the 50/50 contract to do the work employs your husband, then it is the company that employs your husband who is liable for his wages.
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Patricia_Young
New Member
No, they don't, which you will learn when you've been responding on these types of forums for several years.
theretoo
New Member
they could be a direct hire that the employer 'claims' is an ic, but may not be
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
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