A question that's a con man's delight: The Employee or Independent Contractor Scam

You've got some spare hours and want to earn some extra income. You get an offer to become an "Executive Assistant" in an aluminum siding company.. You visit their representative, and look over their literature, handsome colored brochures which proclaim opportunity, opportunity, and more opportunity. But, nowhere are benefit packages mentioned, the usual, medical, vacation, sick leave, termination pay--nothing of this in writing. But, the rep speaks lavishly of these "benefits." You are sufficiently impressed, join the team, find you are only to collect commissions for selling aluminum siding, work a few weeks, get disgusted and quit.

When you go back to collect your pay, the shell game starts. You are told that you were never an employee, but an independent contractor, and delay excuses are made for not having your limited earnings available yet. You get up and go. Then you wait. Next time you try to contact them, you find the tent has been pulled and the company is gone. This is a pattern that is practiced repeatedly, and with much success, by con men who operate under a simple premise, that a conscience does not prevent sin; it only prevents them from enjoying it.

Why this pattern?

Because it enables them "cover," a means by which they can hide behind an advantage to them, a differentiation problem--is he an employee or independent contractor?--that the politicians are too cowardly to solve.

Congress has punted on this due to the difficulty of precise language and because, generally, employers everywhere want to keep the language vague so as to give them more maneuvering room in taking on additional help. These companies assert lobbying pressure against precise language. Some states have laws, but mostly subject to interpretation all over the map. End result? You are caught in the middle.

Only IRS has hard rules covering this debate, the exact nature of which are unknown, but as a general rule run something along this line:

To qualify for independent contractor status a company must not provide any tools to work with. Example: when you, as an employer, call a plumber to come fix your sink, he, as an independent contractor, brings his own pipe wrench. You do not provide this for him You can only supply merchandise which will be used up in the process of the job, e.g. tissues to wipe down the plumber's tools while he is working. The company--you--may not specify work hours. That must be left up to the outside guy, the plumber. No other form of guidance may be exercised. You, as the employer, have engaged a freely-operating contractor to attain a desired result, a workable sink, that's all. The means of getting this desired result must be left up to him. And, importantly, the outsider must not be provided work facilities on a regular basis. This is yet more separation criteria in determining, is this person an employee or an independent contractor? To top off: the outsider submits invoices for services rendered (he works for others beside you). And, employees do not submit invoices.

So how do you protect yourself against these charlatans, expose their rip-off?

> Ask them to write down the work "benefits" they offer, maybe because you wish to ponder them, and / or, talk them over with family and friends. This will rattle their cage, maybe even make them drop you on the spot as a potential "mark."

> Have them clarify, in writing, the status of an "Executive Assistant" as opposed to Sales Representative. A request they will find totally repugnant.

>Ask for a list of references from satisfied customers. Ask for bank references. (Did Hell ever, actually, freeze over?)

You won't have to go much further than this. If these simple requests are filled for you, this opportunity might be worth further pursuit. If not, well, you've saved yourself a lot of time, effort. And, needless frustration.