1. Free Legal Help, Legal Forms and Lawyers. TheLaw.com has been providing free legal assistance online since 1995. Our most popular destinations for legal help are below. It only takes a minute to join our legal community!

    Dismiss Notice

Mandatory Detailed Pay Tranperancy for ICs

Discussion in 'Independent Contractors & Consultants' started by Firmbutfair worker, Feb 11, 2019.

  1. Firmbutfair worker

    Firmbutfair worker Law Topic Starter New Member

    Likes Received:
    Trophy Points:
    Hi I just wanted to know when you're working as an independent contractor and there's tips included in your payments. Why is the breakdown of each job per tip not included? It leads to a doubt on how much actual tip was paid to IC vs amount actually given by customer.

    This leads me to 3 issues:

    1- The amount paid out to the IC is much less then amount provided by the customer.
    Allowing the company to profit even from tips earned by the IC.

    2- The amount of tips paid is not correct but actually inflated by the company in order to avoid paying any taxes on said amount. Which in turn places the tax burden on the IC when tax filing is due.

    3 - when jobs are offered to an independent contractor the total amount paid may already include tips from the customer and companies use this to their advantage by simply deducting what day would originally have paid as a service fee to lower their cost in payouts. For example if something has you $5 as a standard service fee but customers include a $2 tip a conditional payment you won't be offered a $7 payment for the job to completed you would still be offered $5 because companies will deduct those $2 after service fee and substitute the $2 tip given by the customer without informing the IC.

    Find this very troublesome and would like some advice on this issue since I'm sure it's a legal issue thank you for your time and help on this matter and I appreciate any guidance anyone can give me on this matter
  2. adjusterjack

    adjusterjack Super Moderator

    Likes Received:
    Trophy Points:

    Assuming for the moment that you really are an independent contractor you are not covered by any wage and labor laws.

    How you get paid for the services you perform for your client is based on the terms and conditions of your contract with that client.

    Your contract may be written or oral. If it's oral it could be as simple as the client saying "Yes, we get $7 and we give you $5. Accept those terms or leave." If you continue to provide the service under those conditions then you have a perfectly legal contract.

    Answer the following questions:

    1 - What services do you perform for your client?
    2 - What kind of business is your client in?
    3 - Under what circumstances do you perform your services?
    4 - What agreement do you have with your client for payment?

    As for your taxes, you should only be paying tax on money you actually receive so I'm not sure where the problem is with taxes. Did you get a 1099 that says you were paid more than you received?
    hrforme likes this.

Share This Page