1099 Contractor Status - A Bad Deal
The Department of Labor is cracking down on “misclassification” of healthcare workers. Some healthcare staffing agencies pay their staff as 1099 contractors rather than W2 employees. Why would an agency do this? Agencies save money by not offering the basic employment protections that come along with being a W2 employee. At RightPro Staffing we only employ our long-term, temporary and Per Diem healthcare staff on a W2 employment basis. Why would we do this? Two reasons; it’s the legal thing to do, and it’s the right thing to do. Below are some reasons that you should only work as a W2 employee, and not a 1099 contractor.
No Overtime Pay: As a 1099 contractor you are not entitled to over-time pay. All W2 employees must be paid time-and-a-half for any hours worked over 40 hours.
Tax Payments… You’re on Your Own: 1099 contractors are responsible for paying their own taxes. You still owe your State and Federal income tax, but you don’t have an employer doing your tax withholdings and paying them on your behalf. At the end of year, you still owe, but taxes haven’t been taken out weekly.
Taxes… You Pay More: 1099 contractors have to pay both employee and employer taxes. As a W2 employee your employer pays a portion of your taxes for you.
What if You Get Hurt: If you are working as a 1099 contractor and you get injured on the job, you are not eligible for Worker’s Compensation benefits? However, if you are working as a W2 employee you’d be covered by your employer’s Worker’s Compensation policy. At RightPro Staffing you’re employed as a W2 employee and your covered if the unexpected happens.
No Work, No Pay: As a 1099 contractor you are not eligible for Unemployment Benefits. W2 employees are covered by their employer’s unemployment policies.
Legal Protections: Employment laws that protect W2 employees, such as those related to workplace discrimination, harassment, and fair labor standards, often do not apply to 1099 contractors.