Legal Question in Business Law in New York
Hi,
I currently have a sole proprietorship and do freelance work for a restaurant in Westchester County, NY. I have been using my SSN but now they are stating I must get an EIN to be paid or they will be fined for workers compensation for me, is this true?
3 Answers from Attorneys
They are trying to protect themselves against any possible claims for WC. You may pay them for WC COVERAGE or renegotiate your hourly/service fee without getting an EIN, if they are amenable.
The issue is that you are likely misclassified as an independent contractor when in fact you would be considered an employee. I'm not so sure that merely getting an EIN and setting up a single member LLC for example would get them entirely over that hump, but perhaps.
They certainly reserve the right to hire only entities if they wish unless you have a written contract with them.
If you need more clarification, I suggest that you consult with a lawyer in private and discuss your objectives in more detail. You can start by calling around to several for a free phone consultation, get some insights then pick the best fit to work with.
If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.
Our firm is now referred by the American Bar Association (see under the New York section):
http://www.americanbar.org/groups/delivery_legal_services/resources/programs_to_help_those_with_moderate_income.html
Kind regards,
Frank
www.LanternLegal.com
866-871-8655
DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.
A sole proprietor can get an EIN over the Internet, although I don't recall the agency or website. I believe it's the IRS. There may be a minimum fee, perhaps $25 or $35. So just log on and get one!
As counsel before me properly pointed out, it doesn't really matter if you have an EIN or a SS number. The Department of Labor--not the restaurant's management--determines whether you are classified properly as an independent contractor or as an employee. Among the factors the Department of Labor onsider are: 1. Do you work a regular schedule? 2. Are you supervised? 3. Do you have a regular workstation?
To make it easier, typical examples of true independent contractors are the restaurant's accountant, lawyer and it's computer consultant. Typical employees are the hostess, servers and line cooks.
There are some gray areas, such as a highly popular guest chef or the piano player who plays on Saturday nights.
You did not indicate what service you perform for the restaurant so that's the most advice I can give. Hope it's been helpful.
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