Friday, June 25, 2004

Ethical dilemmas

Remember folks, when life hands you a dilemma, make dilemmanade!



You know, is it too much to ask that your daughter not be faced with an ethical dilemma on the first day of her first job?


The EAC had a good first day at work, even manning the stand by herself for most of the afternoon. I mean, it's NOT rocket surgery. We heard all about it and then Mrs. A asked the question, "So did you get a W-4 to fill out?"

"No, she (the owner) said something about me being responsible for my own taxes."


Federal law is very specific on who can be classified as contract labor and who MUST be classified as an employee. The two biggest tests to determine how one is classified are:
1. Can your employer dictate the way you perform your job?
2. Can your employer tell you when to start and stop work?
If the answer to BOTH of these questions is "no," then you are contract labor. If the answer to either of these questions is "yes," then you are an employee. And as a result, your employer is responsible for a) withholding, reporting and paying State and Federal Income Taxes and b) withholding, reporting and paying Social Security taxes - along with their matching portion and c)withholding, reporting and paying any other city/state employment taxes (such as unemployment tax) along with their portion (some are completely paid by the employer).

I figure it saves the snow cone stand about $70 bucks a month by not paying these taxes, but it will cost my daughter an extra $50 bucks a month to pay the Social Security taxes as a "self-employed" worker. (The difference being a slightly lower matching rate for self-employed people.) I figure the snow cone lady thinks that most people won't even bother to worry about taxes (I'd be shocked if she actually issues 1099s), and so she can operate "under the table" with impunity.

You know, life would be so much easier if we could just ignore those pesky ethics.

The EAC wasn't 100% sure she understood the lady correctly, so she is tasked today with asking again about a W-4 (not to mention that there's been no mention of an I-9) just to make sure. If she gets the same answer, she's to finish out the day (since she has no transportation of her own) and I'll call the lady tomorrow and tell her the EAC is not coming back.


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