Legal Question in Employment Law in California

I work for a S corporation in CA that makes its' money by obtaining contracts with the Federal government, and until recently I was a legitimate 1099 contractor (I live in a different state and work from home, providing expert advice.) Recently one of the contracts that the company got required that I become an employee as a term of the contract. My employer has made me a employee but still wants to maintain the 1099 payment structure (where I pay the employer portion of taxes and benefits.) This was part of my new employment contract; for me little has changed except now I am termed an "employee" and receive a W-2 and pay my "employer tax" to my employer rather than the government. Is this legal?


Asked on 7/01/10, 10:53 am

1 Answer from Attorneys

Absolutely not. It is government contract fraud, and it is VERY illegal under California labor law.

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Answered on 7/01/10, 5:19 pm


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