Is it legal for a company to mandate independent contractors converting to employees with less wages?

I am currently an independent contractor teaching one-on-one.  The company I work wants us to convert to part-time employees.  I thought I had a choice to convert or not. I did not plan to convert, for as an part-time employee, I will get $8 less than being an independent contractor.  All I was told was there would be many benefits (no health insurance or paid vacation time).  Still, those benefits are so small and incidental that they are not worth at all.

I should have asked the manager first what the company would do if I don't convert, but I did not.  The manager said, "all teachers are to be converted."

Is it lawful to mandatorily convert independent contractors to employees with much less wages, despite the fact that the workers have to sign and accept the offers in order to make it effective?

10 Answers

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  • 3 weeks ago

    I suspect what happened is they got audited by the IRS and were discovered to have classified you inappropriately, and were socked with back payroll taxes.  If they control the manner and means of your rendering services, you are employee, regardless of the label they decide to put on.

  • Eva
    Lv 7
    4 weeks ago

    You are being converted because the company has been told they are improperly classifying you as an independent contractor. They are now paying their share of your Social Security and Medicare taxes, as well as unemployment taxes, workers compensation insurance, and possibly disability insurance.  It's costing them far more than $8 to have you as an employee than as a contractor. You may think you are being paid less, but since you're only paying 1/2 the ss and medicare tax that you did before, you probably are really getting more.

  • 4 weeks ago

    No.  You can quit your job.  Those are the choices.  They can do what they want unless you are tied into an employment contract in which case, they would have to wait until it expires.

  • 4 weeks ago

    It is not lawful or legal to mandate that anyone work for a company -- you have the right to quit.

    You don't have the right to continue working for the amount that they used to pay.  Either you accept the pay that they now offer, or you stop working for them and get paid nothing.  Those are your two choices.

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  • Scott
    Lv 7
    4 weeks ago

    Yes, they can. Just because you don't like something doesn't mean it's not legal.

  • 4 weeks ago

    It is legal for this employer to decide that they no longer wish to use independent contractors.  

    It is legal for this employer to offer the independent contractors part time employment.  

    You are free to accept or decline the employer’s offer to become a part time employee.  If you decline, you will need to find a new job, as the employer is no longer going to use independent contractors.   

  • A.J.
    Lv 7
    4 weeks ago

    If USA, independent contractors pay double FICA(15.3%) where employers pay 7.65% (half) and employees pay half. As an independent contractor they are not your employer. They are your customer. You are running a business and employing yourself. The contract in place determines the terms and relationship. Your legal business structure determines how you set it up, and if you don't have an accountant, you probably have lost some benefits.

    The US State has certain laws about employers and what they must provide. You did not state your location.You are NOT technically being converted from independent contract to employee LEGALLY. This is two separate events. They are terminating your contract as an independent contractor supplier of service and separately offering you a job to become an employee. You do not have to sign anything. Slavery is illegal. The signing of anything is an acceptance of an employment offer. You don't have to be employed by them if you choose not to be employed. What does your contract state now about their ability to terminate your contract or reduce it to zero dollars? Often, if it is related to teaching, it is a term contract and expires. Once expired, it is ended. They can offer what they want to offer, and you can attempt to negotiate salary, if willing to not accept their offer.  

  • Judy
    Lv 7
    4 weeks ago

    Of course it's legal.  If you don't sign, you're gone.

  • Anonymous
    4 weeks ago

    You're not wording this quite right.   Let me help you.

    A company has the right to stop doing business with any other business (meaning you, a self-employed person) unless there is a contract that says otherwise.

    They have offered you a job as an employee.   You are free to accept or decline.

    They aren't mandating that you do anything.  

    My guess is that they've determined that you really don't meet the IRS definition of independent contractor and they are trying to fix that so they are in compliance with the law.

    There is no reason to ask what will happen if you don't convert.  You've been told they will no longer be using the services of your business.  They've offered you a job instead.   You accept or decline.   

  • KaleyK
    Lv 7
    4 weeks ago

    Would need to know your jurisdiction ..... but in general ......Do you have a contract?  Does it stipulate they can convert you to an employee?  If not, then the company cannot require you to become an employee.  Again based on any existing contract, the company also has no obligation to continue the contractor relationship.    Effectively these are two different issues (1) An offer to become an employee (2)  An offer to be an independent contractor. 

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