Posted by jaxnotary031 on 11/10/13 11:35am
Msg #492190

Would not mind some overtime pay, sick leave

Did thIn their attempts to create standards and more control over third part contractors, did they overlook the IRS, Dept of Labor and the courts. It would be interesting if we could get an opinion from an attorney or someone familiar with labor laws. Interesting article in Forbes about who is considered t be an independent contractor.

http://www.forbes.com/sites/richardtuschman/2013/07/17/theyre-not-independent-contractors-if-the-court-says-theyre-employees/

This is from the article,
Recently a client informed me that some of his workers are independent contractors. I asked the client whether he’s sure these workers are properly classified as independent contractors. “Yes,” the client said. “They signed agreements. It’s not a problem.”

Actually it may be a problem. Under U.S. employment laws, whether a worker is an employee or an independent contractor depends on the application of a legal test, not on the existence of an independent contractor agreement.

From the Dept of Labor
http://www.dol.gov/whd/regs/compliance/whdfs13.pdf

The U.S. Supreme Court has on a number of occasions indicated that there is no single rule or test for
determining whether an individual is an independent contractor or an employee for purposes of the FLSA. The
Court has held that it is the total activity or situation which controls. Among the factors which the Court has
considered significant are:

1) The extent to which the services rendered are an integral part of the principal's business.
2) The permanency of the relationship.
3) The amount of the alleged contractor's investment in facilities and equipment.
4) The nature and degree of control by the principal.
5) The alleged contractor's opportunities for profit and loss.
6) The amount of initiative, judgment, or foresight in open market competition with others required for the
success of the claimed independent contractor.
7) The degree of independent business organization and operation.

There are certain factors which are immaterial in determining whether there is an employment relationship.
Such facts as the place where work is performed, the absence of a formal employment agreement, or whether an
alleged independent contractor is licensed by State/local government are not considered to have a bearing on
determinations as to whether there is an employment relationship. Additionally, the Supreme Court has held
that the time or mode of pay does not control the determination of employee status.

This issue may doom the new standards and may be worth investigating as a challenge to the new requirements.
Although, it may be a way for us to have the companies we do work for make up for all the low ball fees. If they had to contribute to our SS self employment taxes, medicare taxes, and even liable for overtime if a loan signing goes long and takes several hours, overtime pay.
May be worth looking into. What do you think?e SPW & NNA overlook something?

Reply by sueharke on 11/10/13 1:04pm
Msg #492195

I would contact a well-known attorney who specializes in labor law. As the attorney to put on a seminar and take that SPW apart, piece by piece, as part of the presentation. Get enough IC (not only notaries) who are in the same boat to pay for the expertise of the attorney. Let the chips fall where they may.

Reply by Marian_in_CA on 11/10/13 4:02pm
Msg #492198

I can't speak for everyone... for I know that I, personally am not opposed to being hired by these companies as employees. If that's what they want... fine. BUT, if they do that, they are going to have to provide the benefits of being an employee, and NOT

I posted late last night about this, but here in CA, the Dept o Labor assumes every relationship is that of an employee unless proven otherwise. The other issue is that labor laws differ by state... some states have far more strict definitions than others. Like many other things in CA, the rules here are fairly strict and clear.

See: http://www.dir.ca.gov/dlse/faq_independentcontractor.htm

Some people are saying that the companies will get around this by using the term "contract employee" -- but that's not really true. The idea of a "contract employee" is pretty useless -- all that means is that the employer/employee relationship is through a third party.


Here's an example: When I first got out of college, I went to work for Microsoft as a Technical Writer and support specialist for their Certified Partner Program. The job itself was coordinated through a staffing agency/headhunter, even though the people at Microsoft were the ones who ultimately interviewed and accepted me. Thing is, I technically didn't work for Microsoft... I worked for the staffing company. I was a W2 employee and my paychecks came from the staffing company. But, I was still very much an employee and the staffing company had to provide all the "benefits" of employment, in contract with Microsoft. Microsoft paid a fee to the staffing agency and had contracts in place to cover all of the other stuff. However, they were STILL obligated to follow labor laws, provide my equipment, etc. Ultimately, the goal was for me to be brought on as an employee of Microsoft after a period of time (18 months). That didn't happen, but it was for reasons unrelated to the work or the job. That is what is known as a "contract employee". Some people, especially in the tech sector like to be "contract" employees because they can continually work for one agency while often changing jobs, or completing contracts or projects, such as 6-12 months jobs at lots of different companies. It's also common for people who work as temps, such as clerical staffing agencies. This way, companies hire on employees under a contract with a third party. They get the benefits of an employee but leave the complicated work to the third party.

Just because a company has somebody sign a document that says they're independent, doesn't mean that they are. No contract can supersede the law and definitions of employment law, much less reality in general. I can sign a contract with somebody that says that I agree that the world if flat. That doesn't mean it's actually true.

If you read all of the SPW stuff, you'll not that they use the word "employ" a lot. It seems to me that they assume this will be the direction they are going. That also means that somehow, somebody will ultimately have to start acting as a staffing company for notaries -- not just a 'signing agency' but a full on staffing service.

The problem with this is that their own "standards" contradict this because they say, “‘Certified Signing Specialist’ or ‘Specialist’” means an individual who [...] provides signing services as an independent contractor." (D.15: D.15. Signing Professional)

I've sent this information to 5 different accountant that I know and trust, and two attorneys who specialize in employment matters. Of the ones who have been able to get back to me so far... ALL of them said that these standards would never hold up against CA Dept of labor or the IRS in trying to keep us an independent contractors. One of the lawyers said, "Any notary agreeing to these standards deserves to get the screwing they're going to get for being an idiot."

It boils down to this -- if they want to control and privilege of employees, they have to hire as as such. If they want to keep us a arms length at independent contractors, that simply cannot exercise this kind of control.

Notaries need to know their rights under the labor laws of their states. If they want to work as employees, there's nothing wrong with that... but they better not let these companies call them independent contractors to avoid their responsibilities. It's illegal for them to do it.

And... as for CA... as I noted last night... CA considers people whose "duties are an integral part of the operation" to be employees. And since you know who has been telling us for months now that the Notary is "the most crucial" part of the process -- they may already be in trouble by establishing employee relationships with that quote.

Mobile employees are expensive. These companies know it.

Honestly, I think the biggest issue to push in all of this is to push the fact that if they want us as ICs (as it states in D.15) they can't have all these rules. It's just that simple. If they want employees... fine... but they're going to find themselves shelling out a whole heck of a lot more money to do it... or and this is what I think will happen... they are going to hope that they bring on a bunch of notaries who don't have any idea what they're doing so they will just do whatever they are told... and these companies (as well as the NNA) are going to COUNT on it. They don't want those of us who know how to run a business working for them. I dare say they want to put us out of business.

Reply by CarolF/NC on 11/10/13 4:35pm
Msg #492200

I fully believe they intended to classify us as "employees"

but not full time with benefits. Part-time, temporary, contract depending on your state labor laws. You may want to work full time, but your employer does not have to allow you to. They would pay SS, medicare and deduct state and local taxes. Here is my question, who then determines who pays for supplies, equipment, your vehicle expense, education, license, insurance and so on? Isn't that determined by your state labor or employment laws?

And Marian, kudos to you for taking the time to lay it out so neatly.

Reply by FGX/NJ on 11/10/13 4:49pm
Msg #492201

Re: I fully believe they intended to classify us as "employees"

I take signing assignments as a corp.
Can a corp be an employee?

Reply by John Tennant on 11/10/13 5:05pm
Msg #492202

Re: I fully believe they intended to classify us as "employees"

Signing companies are not necessarily corporations. They can be sole proprietorships, partnerships, or corporations. I do not know of any corporation that can be an employee. JMHO

Reply by JandB on 11/10/13 6:19pm
Msg #492206

W2 instead of 1099 w/unreimbursed expenses

you would still deduct your expenses but you know they would reduce our fee because they have to pay ss, medicare and who knows what else. They would tell us what they are paying and I wonder, would we have to option to turn them down???

Reply by John/CT on 11/11/13 9:41am
Msg #492253

Deducting unreimbursed employee business expenses

Subject to a 2% floor of your adjusted gross income (AGI). So, there goes a portion of deduction.

Reply by MikeC/TX on 11/10/13 7:11pm
Msg #492208

If the determination was that Certified Signing Specialists are employees rather than independents (which I suspect could happen, given the level of control the SPW is demanding), then these companies would be on the hook for the 1/2 share of your FICA that could be charged to them. That's going to be a bookkeeping nightmare for everyone involved, including the CSS. For starters, you would have to identify which companies are employing you vs. those which are truly using you as an independent contractor. Then you have to figure out how much of your income is from an identified employer and what their individual FICA contribution would be. I don't think Quickbooks can handle that. I'm not even sure if the IRS can handle that...

I'm also not sure what the employer contribution is for Medicare, or even if there is one, but if there is that just adds another ingredient to the sauce.

However, since you would be at best a part-time employee, you can probably forget about health insurance, paid vacation, overtime, and other benefits...

Reply by Linda_H/FL on 11/10/13 7:33pm
Msg #492212

Also pay to each state's unemployment division n/m

Reply by MikeC/TX on 11/10/13 7:35pm
Msg #492214

I forgot about that - what a mess this will be n/m

Reply by Linda Juenger on 11/10/13 8:35pm
Msg #492222

Medicare: Employee and Employer is 1.45 total 2.9

Employer matches what is withheld from employee

Reply by John Tennant on 11/10/13 9:47pm
Msg #492225

Re: Medicare: The actual match is 7.65%

6.2% SSI and 1.45% Medicare. Yes, you could expect to be offered less per signing to cover what they have to pay.

Reply by JanetK_CA on 11/11/13 2:27am
Msg #492239

Re: Medicare: The actual match is 7.65%

That's probably true even before they take out those fees (and anything else they would end up having to cover, like expense/mileage reimbursement - which would likely be the bare minimum.)

Reply by Shoshana/AZ on 11/10/13 8:17pm
Msg #492220

I don't know if this was addressed, but how do you determine part time vs fulltime? Is it by the hour including drive time and how long it takes to close the loan, faxbacks (if needed) and drop the docs?

Reply by Lee/AR on 11/11/13 7:30am
Msg #492245

Not gonna happen, but what an eye-opener for $60 notaries!

But this thread along with many others ARE the way to fight this. Make noise--lots of noise in the right places.

Reply by sueharke on 11/11/13 11:54pm
Msg #492348

Talk to FedEx drivers who were considered Independent Contractors....until the court decided he or she were employees.