Legal Question in Employment Law in California
The company owes me stocks and wages
Question 1) The company owes me 3 months wages. My question is: Is it blackmail/extortion if I said to my bosses after I quit ''I would like to give you the password (to my PC), but I would also like to get pay.'' ? My bosses said that what I said was blackmail and extortion and they can put me in jail for 3 years. The total wages for 2002 which they owe me is about $5,000. Can they put me in jail for saying that?
Question 2) The company deducted wages from my paycheck in 2002 supposedly to go pay for my taxes (which they didn't pay). In the end, they issued me a 1099 with only the amount they actually paid me. I already paid taxes on that amount. But they owed me the money they deducted. I wanted that money and said I would file tax on that money next year. But my bosses told me to bring in my 2002 income tax. My question is, do I still have to bring in my 2002 income tax return to my bosses? Since I already paid taxes on the money they reported that I made last year. The money that they deducted wasn't reported. They owe me that money, which is about $5,000.
2 Answers from Attorneys
Re: The company owes me stocks and wages
Extortion can occur when one demands money from another under threat of doing unlawful injury to person or property. As another lawyer commented, I know of no law that requires you to give the employer a password.
Also, the Cal Penal Code makes it a crime to fraudulently induce another to work, and it is considered theft.
As to the 1099 question, a 1099 worker is an independent contractor and is not an employee at all. Independent contractors are not subject to wage withholding. So, if their tax position is that you were not an employee, they should not have withheld taxes from wages. So, to subject you to wage withholding and then 1099 your income for the same year is an inconsistent tax postion.
This position works to your detriment, because it subjects you to the higher self-employment tax on your income, while they avoid the social security tax on the same income. It sounds like they have also probably failed to remit the withheld taxes to IRS, which creates federal tax law issues, both civil and criminal.
To represent that they were withholding taxes from you but to actually pocket the money and 1099 your take home pay is effectively stealing the amounts they withheld, which would be another violation of the Penal Code.
Your former employer seems to very much be playing hardball here. You definitely should go to the labor board, as suggested, but if you were really an independent contractor, they will claim no jurisdiction over the matter. You have to decide what you really were, which may require a tax lawyer, and then pursue your remedies, which could require either a labor lawyer or a general business lawyer. You may even wish to consult a criminal lawyer, as filing charges against them may be an option here.
You can e-mail me with further questions at [email protected].
Re: The company owes me stocks and wages
You should bring the back wages issue to the attention of the California Department of Labor. Payment of wages are mandated by law.
I know of no law or cases that require former employers to provide a computer password installed during employment to the former employer.
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