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Archive for the 'Legal' Category

Alienation of Affection

Friday, October 19th, 2007

My thought for the day came out of nowhere when I learned that the alienation of affection law was based on the belief that a wife was the property of her husband. Therefore, when a woman was emotionally or sexually involved with another man, she was considered to have been stolen.

Those who want the alienation of affection laws to remain believe that alienation of affection lawsuits protect traditional marriage.

I thought this was a wild concept to think about in the situation . . .

crazy how life can have such spins . . .

held up decision

Saturday, July 28th, 2007

display of thumbnail images encourages other web sites to distribute copyrighted images.

for more detail about this held up determination [click here]

Steps to file a lawsuit

Friday, November 10th, 2006
  1. Seriously consider whether you have a good case.
    Even if you think you have a good case, take some time to think about whether you can win the lawsuit.

I think I have a good case. It invades privacy and is a SERIOUS exploit!

I have stumbled upon a major item of privacy that could quickly become a large lawsuit that doesnt effect just me but impacts national service of this major corporation.

  1. Determine the theories of law under which you will file your case.
    Do some research on the law and see if it supports your theories.

I am shocked by mobile voicemail vulnerability This is not about (cell phone) operator bashing. This is about generating attention on the blatant disregard of the service provider that may know of this exploit and haven’t generated any action.

Eavesdropping on any telephone call by private individuals is illegal in the United States. Even law enforcement agencies must follow strict guidelines.

  1. Determine whether you have evidence to prove your case.
    Think of and, if possible, locate evidence you will use to prove your case, including documents, writings, objects, records, and so on. Determine whether the evidence you think you have exists and, if so, determine where it is, whether it is in your possession, whether you know where you can find it, and whether you will be able to obtain it. Is there a chance that the evidence will spoil, decompose, deteriorate while you are awaiting trial?
  2. Determine whether there are witnesses who will help prove your case.
    Was there anyone who observed first-hand any of the issues to be determined by your lawsuit? Are there witnesses who can testify about the different types of evidence you will present at trial? Will any of these witnesses be willing to testify on your behalf or would you have to summon them to court? Is there a witness in ill health or about to move to a different location who would be unable to testify for you in court? Can you lock in witness’ testimony through an affidavit or declaration?
  3. Determine the expenses you will incur in bringing the lawsuit and consider sources for obtaining the money.
    Consider the money that you will have to spend to pursue a lawsuit, including filing fees and costs, earnings lost while you pursue your lawsuit, other litigation-related fees, and attorney fees. Can you take money out of your business or out of your home? Do you have savings that you can use to pursue the lawsuit? Do you know anyone who will loan you money to pursue a lawsuit? Is there anything about your lawsuit that would qualify you for any aid in paying for representation? Are you covered by insurance for the matter of the lawsuit?
  4. Consider whether you have the physical and emotional energy to pursue a lawsuit.
    Whether or not you hire an attorney to represent you, you will be either representing yourself or aiding your attorney in your representation. Either way, you will have to spend a considerable amount of time and energy pursuing the lawsuit. Not only will a lawsuit consume a great deal of your energy, it will also likely be an emotional experience.
  5. Think about whether the defendant will sue you back.
    There is always a possibility if you sue someone that they will sue you back (i.e., countersue). If this occurs, not only will you be committing the time, energy, and money to your own lawsuit, but you will also be spending time, energy, and money defending a lawsuit.
  6. Carefully consider whether you will be able to collect on a judgment if you are successful in court.
    It rarely makes sense to file a lawsuit if you know in advance that it is unlikely you will collect on a judgment. Conduct an investigation of the party you wish to sue to determine what types of assets are available to satisfy any judgment you might receive.
  7. Check whether your lawsuit is timely.
    Certain types of lawsuits must be filed within certain proscribed periods of time called statute of limitations. If you are not filing within the proper statute of limitations, your lawsuit will be dismissed. Check to see which statutes of limitations apply and whether you are within the proscribed times.For a detailed discussion about statutes of limitations, see Statute of Limitations Basics.
  8. Before you file your lawsuit, make another attempt to settle your dispute.
    Consider whether there is any other way to resolve the dispute other than by filing a lawsuit.

Why Employers like 1099

Sunday, October 22nd, 2006

Why do contractors want to be paid on a 1099 vs. W-2?

  • The IRS has found that when an individual is responsible for paying his/her own taxes, etc., many times it is not as much as it would be when the employer is paying the correct tax amount. This is primarily due to contractors taking full advantage of any potential business deductions so that they pay less in taxes.

Why do your clients want to pay contractors on a 1099?

  • Managers are trying to meet budget constraints. When a company pays a contractor on a 1099, the employer avoids the cost of employee benefits, employer taxes, etc. These taxes can be between 13-19% of the contractor’s pay. To many managers, these savings are well worth the risk of misclassifying.

  • Managers do not want to pay according to the Fair Labor Standards Act, FLSA (overtime pay). In addition to not paying employer taxes, when a manager pays on a 1099, they do not need to follow the guidelines of the FLSA. The biggest impact of this is in overtime hours worked. According to the IRS, a person paid on an hourly basis must be paid time and one half for each hour worked over forty hours (there are a few exceptions to this rule, see FLSA write-up for more details). By paying on a 1099, the employer avoids this extra expense.

  • Contractors are insisting on it. Many uninformed contractors insist on being paid on a 1099. The impact of misclassifying is much greater on the client. This leaves the burden on the client to determine whether or not they are true independent contractors. Many contractors feel that they should be paid on a 1099 because they are only doing a project for the client. Many individuals, especially the ones with rare skill sets are demanding that they be paid on a 1099 or they will go elsewhere. Unfortunately the client is the one who faces the most in fines, etc., if and when there is an audit. The contractor may have to pay back taxes, etc., but the IRS usually goes after the entity with the “deepest pockets.” It is easier for the IRS to audit and collect penalties from one company than from hundreds of individuals.

Why do recruiters want to make placements on a 1099?

  • The profit margins can be greater. Recruiters stand to earn more money when their candidates are paid on a 1099. If the bill rate is comparable to other bill rates, the recruiter can take a larger portion of the margin, because employer taxes are not taken out.

  • It can be an easier sell to the client. There is no need to follow the FLSA which dictates that time and one half must be paid in most instances. The client just gets one simple bill rate and avoids any overtime issues.

If this is illegal, why are so many companies doing it?

  • They have not been audited, yet. Many companies and contractors thought they found a loophole in the tax laws and decided to utilize the form 1099-misc. This may be a great fix for those that have not yet been audited. Unfortunately, the IRS has decided to crack down on the misuse of this form. For many companies and contractors that have not been audited, this still seems to be a great solution; the reality of misclassifying has not had a negative impact on these people.

  • They have the attitude, “if it is not broken, don’t fix it.” By never experiencing an audit by the IRS, or having to pay back taxes and fines, it is difficult to persuade clients and contractors that it is risky or that it is wrong. Many clients may say that they have always done it this way and don’t see any reason to change.

  • They do not know it is illegal. Many companies may not be current on all laws. Years ago, the IRS’ crackdown on 1099s vs. W-2s was not as great. As they have found abuse of classifications, they have increased their focus on this problem. Many clients may not be aware of this and therefore continue to misclassify, simply due to lack of knowledge.

1099 Controversy

Sunday, October 22nd, 2006

In recent years, the IRS has begun to realize the large sums of potential tax revenue they are losing due to misclassified 1099 independent contractors who should legally be W-2 employees. When a company pays a contractor on a 1099-misc form, they avoid the following: federal and state tax withholdings, deposits and reports, the employer’s share of Social Security and Medicare taxes, state and federal unemployment insurance premiums, state disability insurance premiums, Workers’ Compensation costs, fringe benefits, vicarious liability for employee negligence, and EEOC regulations. Similarly, when contractors are paid on a 1099, the contractor can deduct many business expenses, and as a result, pay much less in taxes each year. The IRS estimates that it loses between $4 to $20 billion per year in unpaid taxes as a result of this misclassification problem. Understandably, the IRS has made it a priority to investigate 1099-misc forms that are turned in at the end of the tax year. The IRS is conducting audits to determine whether or not contractors are being properly classified. Many large companies, that all of us are familiar with have recently been audited, some of these companies include: IBM, Sybase, Microsoft, and Time Warner, just to name a few. After being audited, these companies have been assessed huge fines for being in violation of laws that determine whether an individual should be paid on a 1099 or a W-2.

W-2 vs. 1099

Sunday, October 22nd, 2006

When a person is paid on the form W-2, the employer automatically withholds and pays all of the necessary employee income taxes as required by the IRS. These taxes include: Federal Income Tax, State Income Tax, and FICA (Social Security and Medicare). In addition, the employer will pay all of the necessary employer taxes. These taxes include: FICA (Social Security and Medicare), FUTA (Federal Unemployment Tax), and SUI (State Unemployment Tax).

When a person is paid on the form, 1099-misc, all money earned by the individual is paid on an untaxed basis. It is then the responsibility of the individual to file and pay the appropriate taxes.

Could the contractor be considered an independent?
An individual that is an independent contractor fills the following roles:

  • The independent contractor will work with a number of clients.
  • The independent contractor’s role is to accomplish a final result and it’s the independent contractor who will determine the best way to achieve that result. The independent contractor will define what the agreed upon “result” is in a contract with your customer.
  • The independent contractor pays his/her own taxes and files the required government forms.
  • A city license, business license, and a fictitious name or dba statement will be obtained by the independent contractor. Also, the independent contractor must obtain any necessary permits.
  • Social Security taxes are the sole responsibility of the independent contractor.
  • The independent contractor must obtain his/her own benefits including workers’ compensation, disability, etc. The independent contractor is not entitled to any typical employee benefits from any government agency.
  • The independent contractor can deduct business expenses from his/her income tax.

Does Incorporation Matter?
There is a lot of confusion regarding independent contractors. Many employers realize that it is not a good idea to pay contractors on a 1099, but believe that if the worker is incorporated, it is okay. This is not necessarily the case. It is very simple to obtain a Federal Tax ID number for a business. This ID number is not an automatic protection from misclassification.

As always the IRS’ 20 Point Checklist comes into play. Ultimately, the IRS is going to look at the work environment and who has control. An individual that is incorporated and working at a company could easily be considered an employee depending on the circumstances.

Three Main IRS Factors
Basically, the IRS’ 20-Point Checklist focuses on three main factors:

  • How much control the employer has over the worker’s behavior and work results. (Who controls training, where and what time the person works, what equipment they use?)
  • How much control the employer has over finances? (Does the employer have primary control over the person’s profit or loss?)
  • What is the relationship between the parties? (Does the worker receive benefits? Is it a long-term relationship?)

IRS Questions in Court
Ask the five questions one court asked an employer (company) when considering whether workers were common-law employees:

  1. Who recruited them? (Recruiter/company = more risk.)
  2. Who trained them? (Company training = more risk.)
  3. What was the duration of employment? (Longer assignment = more risk.)
  4. Did you have the right to assign extra work? (Yes = more risk.)
  5. Did you have control over such things as firing, discipline, and rewards? (Yes = more risk.)

Protected: Confidential Disclosure Agreement

Tuesday, June 27th, 2006

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