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29 Jun, 17
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What if AV Freelancers Filed a Class Action Lawsuit?

Citigroup pays $325,000 to IT Workers for Wages Owed

I read an article recently about a group of IT Technicians who had got together and filed a class action lawsuit against Citibank, alleging they were a joint employer with a staffing agency. Citibank had classified them as Independent Contractors to avoid paying the overtime they had worked (anything over 40 hours in a work week). Read the article here: 

Citibank ended up paying the IT Technicians $325,000, split between the 18 of them, depending upon how many hours beyond 40, each of them worked.

Just today, there was a class action lawsuit filed by exotic dancers who were awarded 6.5 million dollars across 18 states for misclassification as Independent Contractors. Read the article here:

Also today, I read in one of my trade magazines that the former CEO of Uber, including others, have been named in a class action lawsuit in the event Uber goes away. Read the article here:

My point in bringing this to light is that no one or no business is safe! If it is not the Department of Labor, it can be the employees. If it is not the employees, it can be the IRS. You are playing a dangerous game by classifying some freelancers as contractors, especially if they don't really qualify at all.

I will tell you that the Department of Labor is on our tail. They have called up at least one "labor company" that does not withhold payroll taxes and this is just one that I know of. There are probably 50 more out there. I'm also hearing that several companies that have hired them and given them a good deal of their income have gotten tapped by the DOL for wage and hour violations as well. Not paying overtime after 40 hours to hourly technicians is against the law. So those of you who think you can't be touched, because you go through a company, are wrong in thinking you are safe. They can, and will, open anyone's books that they want.

This is no joke. This is real income the freelancers did not get by "LAW" so they are trying to make it right for the workers. That what the Department of Labor does; they make it right for the workers, Independent or not! There are laws that cover all of these situations. Read this link to the Department of Labor Wage & Hour division here Do your own research.

Here in Massachusetts, the Secretary of State is in a commercial stating he will go after any employer not paying overtime after 40 hours. That employers "are stealing your money" if they don't pay you overtime and that he will get you the pay you deserve and prosecute any employer who does this to their employees.

My companies, Immediate Connections and Hire Me Direct have both withheld taxes on my AV technicians since day one because I wanted to control quality. It was important to me to have standards the AV freelancers lived by in order to work for me. By correctly classifying AV freelancers I would get to tell them what time to get to work, what to wear and have that control because it is my company and I didn't want Independents going out on their own representing my audio visual labor company. I also wanted to provide some protection to my clients. You can trust us when you do business with Immediate Connections or, that we are classifying our audio visual technicians properly.

Here are some very important things NOT to do that could stem an audit by the IRS:

1. Issuing a 1099 and a W2 in the same year to one person. (Very big red flag.)

2. Not sending out any 1099 forms at the end of the year to all to your Independent Contractors.

3. Inaccurate Social Security Numbers or Federal Identification Numbers on those 1099 forms.

4. Inaccurate Company Names or issuing a 1099 under a personal name if they have an FID number. Most companies that have an FID number have a business name and could even be incorporated and in that case, you don't even have to send an incorporated business a 1099 at all.

5. Be very careful in selecting who is and who is not an Independent Contractor in the first place.

For your protection, always ask for a Certificate of Insurance from these vendors and if they don't have one on them you may decide to treat them as an employee instead, based on the 20 rules set up by the IRS determining who is qualifies as an Independent Contractor. If there is any question, you may want to put them on payroll to be safe. I have designed a form that might assist you in determining who qualifies as an Independent Contractor and who as an employee. If you are honest when you fill it out, it will get you results for each and every person you hire. 

You should ask all your AV labor resource companies if they withhold employment taxes and pay overtime after 40 hours before giving them an order to avoid any involvement in a DOL audit. It is very simple to make sure you are covered!  

Thank you for reading this. If you have any questions on this topic, I am a non-legal expert on the subject and have over 30 years of audio visual staffing experience! I would love to help you so give me a call: (617) 755-7247

Patty McGoldrick - President, Hire Me Direct


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freelancers av technicians Audio Visual Technicians class action lawsuit

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Patty McGoldrick

Patty McGoldrick

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