Your boss may be illegally paying you as an Independent Contractor instead of as an employee. That can save your boss a few dollars in the short run but it is a bad deal for you.
As an independent contractor, you will:
- Pay about 7% more in taxes and probably have to file tax forms every four months;
- Not be covered by workers compensation insurance;
- Be ineligible for unemployment; and
- Be unable to take medical or pregnancy leave under the Family and Medical Leave Act.
True independent contractors are generally given a task that needs to be accomplished, a timeframe within which to complete it, and nothing else. They do the task however they want, using their own tools and equipment, with no supervision by the company that hired them. Unlike employees, they usually do not punch a clock, work at the company’s office, get bonuses or wear uniforms.
If you are misclassified as an Independent Contractor, federal and state laws allow you to sue your employer and recover up to 2x your wages, back taxes, and attorney fees.
If you think you might be the victim of misclassification, see an attorney or check out these IRS resources: a good video and an even better web site that both talk about the issue. If you like checklists, you can also read this tax decision that lists the 20 factors you should consider.
by Administrator on Mar.17, 2013, under Bankruptcy, Car Dealers & Auto Fraud, Consumer Protection Laws, Consumer Resources, Credit Issues & FCRA, Lemon Law & Car/Boat/Motorcycle/RV Warranties, Mortgage Issues, Tenants' Rights
Its National Consumer Protection Week!!! Ok. Maybe it’s not as exciting as March Madness, but it’s a big deal for those of us who practice consumer law.
The Federal Trade Commission organizes the week to help consumers make better-informed decisions regarding how they spend, save, and invest their money. The FTC also wants to encourage people to stand up for their rights when unscrupulous businesses steal their money. To do my part, I’m providing these links to web sites loaded with reliable information:
Credit & Identity Theft Problems
Buying a Car
* If you are buying or leasing a new car, the information on this site will save you thousands. It is the most valuable link in this column.
Financial Advisors & Investments
Cheating by Banks & Credit Unions
Dealing With Debt
Bankruptcy Attorneys & Advice
“Bankruptcy Basics” Videos
American Bankruptcy Institute Consumer Information
Common Consumer Scams
The Consumerist Blog
Landlord Tenant Issues
Consumer Advocacy Agencies & Organizations
Most people recognize the warped priorities of parents who obsessively enter their children in child beauty pageants like Toddlers and Tiaras. As creepy as the pageants promoters are, there is nothing misleading about what they offer parents in exchange for their entry fees: the chance to strut their child around a hotel ballroom trying to win oversized trophies.
But, as your children get older, you may be confronted by a more dubious group of charlatans, who appear less pathetic than the child pageant promoters, but who use outright fraud get you to part with your money. Those swindlers are found in the swelling ranks of talent agents, scouts, schools and photographers involved in the teen modeling industry. Their calling card is often an invitation for your child to take part in a modeling convention sponsored by an organization like the IMTA.
Years ago the New York Post exposed the International Modeling and Talent Association’s ‘conventions’ as well produced events designed to separate aspiring performers and models from their money – thousands and thousands of dollars in many cases. According to media reports, local talent and modeling agencies dupe parents into forking over money for classes to get ready for IMTA conventions with the promise that their children will be scouted by big-time agents. They point parents to the fancy IMTA web site and brag about a handful of stars who attended an IMTA event. (Note well those stars probably have not endorsed the IMTA and nor do they have anything to do with it now.) The reality is all your child is likely to get out of a convention is a very expensive vacation and the chance to pretend to be an actor or model in front of a bunch of adults who are pretending to be industry titans.
A variation on the convention gimmicks are ‘open call’ auditions and model searches advertising on the radio in New England lately. The ads grab your attention by mentioning Disney stars (even though Disney has nothing to do with the events) and urge you to call to reserve a time for your child to meet with a talent agent. Guess what? The agent is going to love your child and promise you his or her ‘look’ is just what Hollywood is looking for. Some bottom feeders in the industry may even approach you or your child in a mall with the same hollow promise. Trust me though, the only potential the agents see is the potential to squeeze money out of you for photos, coaching and talent classes.
My advice is:
- Run away from any agency that takes part in IMTA events.
- Be leery of similar events by the Modeling Association of America International (MAAI), IPOP competitions, Millie Lewis Actors, Models & Talent Competitions (AMTC), and International Talent Showcases (ITS).
- Read about common modeling and acting scams at this Federal Trade Commission web site or this Better Business Bureau page.
With certain limited exceptions, the federal Fair Labor Standards Act states employees who work more than 40 hours in a week must be paid for those extra hours at a rate not less than time and one-half their regular rate. They have to be paid in money, not with ‘comp time.’ However, if an employer can prove that an employee fits into one of the limited exemptions spelled out in the Act, or similar state laws, that employee is not entitled to overtime. The burden is on the employer to prove the employee is exempt.
The Act became law in 1938 but certain industries have convinced Congress to exempt them from its various provisions. It is therefore littered with odd-ball exemptions – including one for some auto parts clerks and one for some radio announcers – that makes it impossible to say everyone is entitled to overtime.
The odd-ball exemptions aside, determining who is exempt from the Act’s overtime requirements must be done on a case-by-case basis. (So two people can hold the same title but only one might be exempt.) For employees to be exempt, their employer must generally prove the employees:
1. Earn at least $455 per week.
2. Are paid on a salary basis. That means they get paid the same every week they do any work no matter how many hours they actually put in during that week. Their wages cannot be reduced if they cut out early to go to a doctor’s appointment, or a child’s soccer game, or even if the business is closed because of bad weather. It also means their wages cannot be reduced based on how well they did their job that week.
If the employer cannot prove all three things, and the employees earn less than $100,000 per year, the employees are usually entitled to overtime.
The Duties Test
It is almost impossible for blue collar workers to pass the Duties Test. On the other hand, professors, professionally licensed engineers, certified public accountants, doctors and lawyers rarely flunk the exam because they are deemed professionals. Most legal fights involve people who fall between the two extremes into the executive and administrative categories.
To be exempt executives, the employees’ primary duty must be managing a business or department, they must supervise at least two people, and they must have authority over hiring, firing, and promoting people. Most shift managers, assistant managers and supervisors don’t have that kind of authority and they therefore will flunk the Duties Test and be entitled to overtime pay.
To be exempt administrators, the employees cannot be doing manual labor and their primary duty must include exercising “discretion and independent judgment with respect to matters of significance.” That means secretaries and administrative assistants will not pass and they must be paid overtime. Similarly, people who order office supplies and make other minor decisions for the business will not be exempt.
There are reams of regulations and court decisions dealing with the Duties Test so you may need an attorney to help determine whether you are exempt.
As an employee, you can sue and recover double the amount of overtime pay your company cheated you out of in the prior two or three years. On top of that, your company will have to pay your legal fees if you win in court. If you do not want to sue, you can also file a complaint with the Department of Labor but it rarely gets involved in individual cases.
If you own a business and want to make sure you are complying with the law, you can check the Department of Labor’s on-line eLaw Advisor. Then check with your state department of labor because state laws are sometimes stricter than the FLSA.
Reprinted from www.GoLocalProv.com article by John Longo
GoLocalProv recently published John Longo’s article explaining the False Claims Act and how cheating-bicyclist-turned-whistleblower Floyd Landis may receive millions of dollars because of it.
The Act is a Civil War-era law Congress passed to fight fraud by government contractors. The Act requires anyone caught collecting money from the government based on a false claim to repay up to three times the amount they fraudulently obtained. To help uncover fraud, the Act contains qui tam provisions that allow individual whistleblowers to bring lawsuits against people who defraud the government and then rewards them by letting them keep15% – 25% of the money they recover for the government.
Reporting Fraud on RI & MA Governments
Rhode Island and Massachusetts have false claims laws that are very similar to the federal Act and both require the whistleblower to actually file a lawsuit before they can earn a commission. The Rhode Island law rewards whistleblowers with 15% – 30% of whatever the state recovers; the Massachusetts law gives them 10% – 30%.
Reporting Tax Cheats & SEC Fraud
Whistleblowers in False Claims Act cases must actually file a lawsuit to earn their cut but the IRS and the Securities and Exchange Commission makes it even easier for tipsters to earn money for their information. The IRS rewards people who simply turn in big tax cheats with 15% – 30% of whatever it collects and it lets them do it anonymously; in October it gave a whistleblower $38 million. (But think twice before turning in your neighbor because the IRS only pays if your tip results in it collecting at least $2 million.) Similarly, the SEC now gives whistleblowers 10% – 30% of any fine over $1 million it collects based on their tips.
Freezing temperatures in Rhode Island have residential Tenants and Landlords wondering about who is responsible for heating apartments and how warm they have to keep them.
When Landlords control the heat, they generally must keep the apartment at least 68 degrees from October 1 to May 1. RI law does not require that the tenants be able to adjust the thermostat.
If the Tenant is responsible for the heat, all the landlord has to do is provide and maintain a working source of heat – the Tenant then must pay for the gas or oil to keep it running.
For More Information
Resources for Lawyers
GoLocalProv recently printed John Longo’s advice about gift cards. The bottom line is you should use (or sell) them now before you lose them, they expire or the company goes out of business. Here is what the law says about them:
Gift Cards or Gift Certificates Issued by a Local Rhode Island Business
- Regulated by Rhode Island state law.
- Cannot expire.
- Do not lose value over time.
- Can be redeemed for cash once the value is less than $1.
- The merchant does not have to reissue it if you lose it.
Gift Card or Gift Certificate Issued by a Local Massachusetts Business
- Regulated by Massachusetts state law.
- Can expire after seven (7) years.
- Do not lose value over time.
- Can be redeemed for cash once the remaining value is 10% of the original value.
- The merchant does not have to reissue it if you lose it.
Visa, MasterCard, Discover or American Express Gift Cards
- Issued by banks and accepted at stores that accept credit cards.
- Regulated by The Card Act of 2009, a federal law.
- Can expire after 5 years.
- Can lose value after the first year because of maintenance fees.
- Can be reissued if it is lost or stolen but fraudulent charges will not be refunded.
- Cannot be used for on-line shopping because there is no name or address associated with its owner.
Major Store or Restaurant Gift Cards
- Most do not expire and most do not lose value because of fees. (Macy’s, Target, Walmart, Chili’s, Cheesecake Factory, etc.)
- But read the fine print because, if the business opted to issue it in such a way that it is exempt from state law, the card can expire and it can lose value because of maintenance fees.
Groupon or LivingSocial Deal
- The law on these is evolving as authorities wrestles with whether they are gift certificates or coupons.
- You generally have to use the entire voucher at one time. (So if you only buy $40 worth of food with your $50 voucher, you cannot use the remaining $10 for your next purchase.)
- After a voucher expires, both companies tell merchants they do not have to honor the entire voucher (i.e. $50 of food for $25) but they do have to credit the holder with the purchase price of the voucher (i.e. just the $25 cost of the $50 voucher).
- Groupon promises to refund the purchase price of a voucher if a business closes; LivingSocial only promises a refund if the business closed before the deal expired.
Reloadable Value Credit Card
- Worst cards for consumers.
- Issued by companies like GreenDot and Vanilla bearing a Visa or MasterCard logo.
- Lose value every month because of maintenance fees.
- Typically charge lots of ‘junk’ fees including a fee for checking your balance.
- Can be used at ATM’s if you pay fees up to $4 per withdrawal.
- Can be used for on-line shopping if you register your name and address.
If this article did not scare you into using your gift cards right away, consider selling them at a site like GiftcardRescue.com, CardPool.com or Giftcards.com. The sites will typically pay you 80% – 90% of a card’s face value if it is from a national chain.
Once you sign an apartment lease in Rhode Island, you generally cannot break it unless:
- Your landlord fails to live up to his obligations under the lease;
- You notify the landlord of his failure; and
- The landlord does not remedy the situation.
You should anticipate your landlord will lie and say he did not do anything wrong so, if you want to break your lease, get legal advice and start assembling evidence you can use in court (certified letters to landlord, pictures of the problems he is not fixing, receipts for repairs you make yourself, etc.).
Citadel represents tenants who have disputes with their landlords. Our office is located near Providence College just minutes from East Providence, North Providence and West Warwick. We have represented college students in housing matters including Johnson and Wales students. If you are living ‘down the line’ at URI, or off-campus from Sale Regina, we can meet you at an office in Wakefield or Newport.
Additional Rights For Elderly Tenants
If you are 65 or older in Rhode Island and you are moving into a nursing home, an assisted living center, or housing for the elderly, you can probably break your current apartment lease by giving your landlord 45-days notice because of Rhode Island law RIGL 34-18-15(e).
For More Information:
Read the RI Landlord Tenant Handbook .
For elderly residents, consult a local Elder Law attorney such as Laura Krohn.
Extended warranties and accidental protection plans are a waste of money. If you doubt that, put aside the glossy brochure, ignore what the salesperson is saying, and read what will matter when you try to make a claim – the small print. Here is what you are likely to find:
- Breaks vs. Breakdowns – An errant Wii controller flies off someone’s wrist and cracks the screen on your new TV. The TV is definitely broken. But it did not suffer a “breakdown” according to the Wal-mart Product Care Plan so they can deny your claim.
- Breakdowns vs. Covered Breakdowns – Water splashes on your new camera wrecking its internal circuitry. Fried circuitry is a textbook example of a breakdown. The repair facility takes it apart and notices a hidden moisture detection sticker indicates the camera got wet. You lose; breakdowns caused by the introduction of “foreign objects” are excluded from the Sears Protection Agreement you bought.
- Normal Wear and Tear vs. Accidents and Abuse – During an excited Halo 4 competition, your kids yank the cord on the new Xbox so hard they break one of the connections. Parents might consider that damage from normal wear and tear. Unfortunately, the Toys-R-Us R Buyer Protection Plan considers it accidental or abusive damage so they can deny your claim.
- Accidents vs. Real Life Accidents – You put your iPad on the roof of your car, buckle-in your child and drive away. Your iPad is iSmashed. You think you’ll get a free replacement because you distinctly remember the BestBuy salesperson saying the Geek Squad Protection Plan was different and it would cover all accidents and even broken screens. But the small print says ‘no coverage’ for falls from moving cars.
These examples deal with consumer electronic items but you will find the same loopholes in plans covering appliances, cell phones, outdoor equipment, cars and even jewelry.
Ignoring their dubious value, stores place tremendous pressure on front-line employees to sell warranties – setting quotas, awarding bonuses and forcing out non-performers. In my experience, the store managers then pretend they don’t hear the wildly exaggerated promises their employees make about what the plans cover. To understand how greed, or just a store’s survival instinct, can trump honesty, consider a few years ago SmartMoney reported that as much as 50% of BestBuys’ profits came from selling protection plans. 50%!
Despite the legal loopholes in the plans, they do cover some problems. Consumer Reports, the most reliable source for shopping advice, studied how infrequently those covered problems occurred, how often they were already covered by free manufacturer’s warranties, and the actual cost of fixing them. Its verdict?: “We’ve long found extended warranties to be a bad deal for you and advise against buying them but stores keep pushing them because they are so profitable.”
A better alternative to an extended warranty is shopping with a credit card that automatically extends the manufacturer’s warranty. Earlier this year CardHub reported that was a standard benefit with all American Express and Discover cards and with most MasterCard and Visa cards.
For More Information
Have you watched Operation Repo on TruTV? It is ‘reality’ show that follows the antics of a family run auto repossession business. As a consumer rights attorney, I would love to represent some of the unfortunate victims of the show’s apparent abusive repossession tactics.
Why? Because in every state that I know of it is illegal for a repo agent to take a car if doing so would “disturb the peace.” So when the car owner tries to get into the car before they hook it up, the repo agent has no right to put his hands on her to stop her. And when the owner tells the repo agent to get off her property, the repo agent has no right to stay there.
Rhode Island car owners enjoy even more protections from abusive repo tactics and threats from ‘buy-here, pay-here’ car dealers including:
1. Before they can repo your car, the lender or dealer must send you a very specific letter telling you about your rights. They have to send it after you fall behind – they cannot merely give it to you when you buy or lease the car.
2. They cannot go onto your property to take your car unless they get permission at the time they want to take it - they cannot claim you gave them permission when you bought or leased the car.
For More Information on Auto, RV and Motorcycle Repossessions
- Read about illegal repossession tactics under Rhode Island law.
- See the Rhode Island Repossession Act here.
- Learn about the hidden costs of “voluntary” repossessions here.
Yesterday, GoLocalProv published this article I wrote explaining why it is usually best to charge things to your credit card instead of paying for them with your debit card or cash.
Do not overspend! But once you decide you can afford to buy something, you are usually better off paying for it with a credit card then paying the bill at the end of the month.
For More Information on Using Debit and Credit Cards
- Learn about the Fair Credit Billing Act that protects you when you use your credit cards.
- Learn about the Electronics Funds Transfer Act that governs debit card transactions.
Landlords in Rhode Island may not demand residential tenants give them the 1st month’s rent, the last month’s rent and a security deposit. Chief Judge LaFazia, of the Rhode Island District Court, has repeatedly stated doing so is really demanding a security deposit greater than 1 month’s rent and it is therefore prohibited under the RI Residential Landlord and Tenant Act.
If your employer does not let you leave during your lunch break, do they have to pay you for it?
Morally, yes. Legally, maybe.
Under the federal Fair Labor Standards Act, your employer does not have to pay you during your lunch break if you are “completely relieved from duty” during the break. Not letting you leave is one thing that would be considered but under many circumstances your can be “completely relieved from duty” even if you cannot leave.
If you think your employer is shortchanging you, you should meet with an attorney to discuss things like what you can do during lunch (sleep?), what, if anything, your employer expects you to do during lunch (i.e. watch a piece of equipment? help out if it gets busy? respond to frequent emergencies?), where do you have to stay (at your desk? inside the building? on the property?) and why you are required to stay (safety? security?). If you have to pitch in when things get busy, stay at your desk, or answer the phone, you may have to be paid during lunch.
For More Information
For the Public: Read about the FLSA at the federal Department of Labor web site.
Read about your rights under Rhode Island law at the state Department of Labor and Training web site.
Its a sad day for the former employees of Curt Schilling’s company, 38 Studios, as well as its creditors and the taxpayers of Rhode Island.
While Citadel typically represents consumers who need to file bankruptcy protection, I am posting some of the documents 38 Studios filed in the U.S. Bankruptcy Court in Delaware today. The case was assigned to Judge Mary Walsh.
The United States has generous bankruptcy laws because we want to encourage people to take risks and start new businesses. I applaud Curt Schilling for doing that and for investing so much of his own money into his dream. Like Steve Jobs and Bill Gates, he needed more than just his money to build his company so he sought investors. Unfortunately, instead of venture capitalists providing that money, the prior Rhode Island Governor volunteered taxpayer money. The Governor took a big risk with our money and we lost.
Bankruptcy Documents for 38 Studios, LLC
Voluntary Chapter 7 Petition – Asking the Court to liquidate the company and disclosing its affiliated corporations.
Corporate Authorization – Signed by Curt Schilling and other corporate officers authorizing the bankruptcy filing.
Corporate Disclosure – Listing Curt Schilling as the only person who owns 10% or more of the company.
List of Creditors – 45 page list of people and companies 38 Studios owes money. Includes a few Rhode Island non-profits.
Attorney Compensation – Disclosing the company’s bankruptcy attorneys have been paid over $35,000.
Statement of Financial – Listing Curt Schilling as owning 82.9% of the company, disclosing payments to its creditors in the company’s final days, listing some of its charitable contributions, and listing payments to its owners in the past 12 months. (It says Curt Schilling was not paid any wages in the past year but the company did pay $16,455 for his insurance and $39,425 for his business travel.)
Bankruptcy Schedules Part 1 – Detailing some of the company’s assets and liabilities. It also includes information on relocation agreements the company made to entice some employees to work in Providence. (It apparently agreed to buy and then re-sell 7 of their homes but it has only resold 1 of them so far.)
Bankruptcy Schedules Part 2 - More details and lists of creditors.
Bankruptcy Schedules Part 3 – Even more details and creditors.
341 Notice – Telling creditors they have to stop trying to collect any debts from 38 Studios and notifying them of the Meeting of Creditors on July 10, 2012, at 2 PM in Delaware.
Bankruptcy Documents 38 Studios Baltimore, LLC
Bankruptcy Documents Mercury Project, LLC
Bankruptcy Schedules – Not filed as of 5 PM on 6/7/12.
Bankruptcy Documents Precision Jobs, LLC
This is the most recent corporate information 38 Studios filed with the RI Secretary of State.