Independent Contractor and fees...

I have question about being an Independent contractor for a large company and fees that are associated with that. My CPA doesn't have an answer and I haven't checked with a tax attorney yet. Thought I would check with others if they have similar experiences.

I will leave company names out but I IC for a large event photo company. That company has recently changed its payroll provider and is now passing along the cost of that to each of its ICs in the form of a per check fee. So now we are being charged a fee in order to get paid from this company. This has a lot of the ICs really ticked off but no one is really sure if anything can be done about it. Since the pay is decent, no one is really complaining out loud for fear of being let go if they do complain.

So my question is... Is this legal? Can a company that hires independent contractors charge that independent contractor a fee in order to get paid? Seems really unethical to say the least, but not sure if its legal or not. Anyone has any experience with this?

Thanks

Just out of curiosity, is it fixed fee, based on amount of check or percentage?

blindhog wrote in post #13990050
Just out of curiosity, is it fixed fee, based on amount of check or percentage?

Fixed.

I'm sure that this will not be of any immediate help but I would guess it would all depend on what it says in your contract.

That said I also do some work as an IC and I get paid what I invoice - how the company manages and pays for its payroll is nothing to do with me. If they just started levying a charge onto me without informing me and getting my agreement beforehand then I would most certainly object.

I'd just add it into my quote, plus a little more to make up for the aggravation.

Pay to get paid..a new twist on pay to play..who comes up with these things..
I agree make them pay the new fee by revising the contract and bid.
cheers
Darrin

I would contact your labor board in FL for a much better understanding of the legality of such an arrangment.

I'd also be curious if you refused to pay the fee if they would infact withold your paycheck. That would be IMHO a serious breech of labor laws.

Here is the information for the FL branch of NLRB taken from their website:

This does NOT sound legal or right. I wouldn't put up with it, w/out making sure that it's in fact legal for them to be charging you for getting paid.

No invoicing or bidding involved and the contract was actually amended and implemented AFTER I had already shot an event but not yet paid. That is one of the main things that urked me.

This is the kind of company that you either accept their terms or don't shoot for them. No negotiation. I am ok with that part of it which is why I am asking about the legalities of it.

CMfromIL - Thanks I will check that out.

I can't "refuse" to pay it as it is automatically deducted from the check. Since this is not a work of hire agreement, do typical labor laws still apply?

This is more of a principle thing, its only a few dollars each check. Not enough to **** and lose the chance to make money from them, but if it is illegal, that will be brought to light.

The nationwide retailer that I used to work for started paying their part-time employees with a loaded cash card in lieu of a paper check or direct deposit. The cash card gave you one "free" transaction every two weeks; after that they charge two bucks per transaction.

So presumably it's legal. But it's a bit shady.

All the employees hated it, but nobody quit because of it.

cory1848 wrote in post #13991461
I can't "refuse" to pay it as it is automatically deducted from the check. Since this is not a work of hire agreement, do typical labor laws still apply?
This is more of a principle thing, its only a few dollars each check. Not enough to **** and lose the chance to make money from them, but if it is illegal, that will be brought to light.

I don't know. But I'd start with the labor board. If they cannont help you, they should be able to direct you to the correct place.

Good luck, and keep us posted. This is interesting.

nathancarter wrote in post #13992135
The nationwide retailer that I used to work for started paying their part-time employees with a loaded cash card in lieu of a paper check or direct deposit. The cash card gave you one "free" transaction every two weeks; after that they charge two bucks per transaction.

So presumably it's legal. But it's a bit shady.

All the employees hated it, but nobody quit because of it.

But at least they had the option of withdrawing all it during that one transaction right?

It is absolutley legal. Its just they are not trying to hide it by lowering the ammount paid. They are being open about it which is a good thing. They are simply passing on the fee. Just as any item in the store is artificialy about 3% higher than it should be because a lot of people buy with credit cards. And the credit card company takes about 3% of what they process. But that is not explained on the price tag. It is just rolled into the price.

Something along the same lines happened to me. Totally different, but the "pay to be paid" concept was there. I simply "accepted" it with a smile, then raised my fee on the next job, actually a bit more than the fee I had to pay. I just rounded off the fee. So it ballenced out for the positive for me. And the client was happy as I was not one of the complainers. They simply took my increase as normal, as you should have a written increase built into any contract.

Do they give you the option of direct deposit at no charge? I've seen companies that, in an effort to get everyone on direct deposit, have started charging a small fee to have a check cut.

jra wrote in post #14005899
Do they give you the option of direct deposit at no charge? I've seen companies that, in an effort to get everyone on direct deposit, have started charging a small fee to have a check cut.

Nope, they actually just added that option but the fee is still there.

Just curious if you had contacted the LRB, and what their reply was to the question.