I was talking to some young people today about their employment. One told me they worked for Domino's Pizza owned by DP Salisbury, LLC and that they had just received their 1099 tax forms today 3/2/08. I asked them why they got a 1099 rather than a w-2. They informed my that they received a w-2 which had been postmarked at the end of January but they got their 1099 today. I was confused. I asked why they got a 1099 if they also got w-2's. To my amazement I was told that they received w-2's for the first forty hours because they were paid on the books. They were paid by "contractors checks" for anything over 40 hours so they wouldn't have to pay taxes on it. First, 1099 misc. are due to recipients or are to be postmarked by the last day of January. More importantly, it appears as though these young employees were paid by "contractors checks" so that the company wouldn't have to pay overtime. I don't think selling pizza's is contract work.
If this is the case, it is illegal. Employers must pay one and a half times the regular hourly rate for every hour worked over forty hours a week. (Certain exceptions apply) what do you all think?
DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
1099's don't have to go out until the end of February
ReplyDeleteYou're right on Granddad. I just wonder if their accounting firm is the same one the County just tried to use?????????
ReplyDeleteI have heard of some businesses getting around the law because the delivery people use their own vehicles and insurance. They also "sell" the product (pizza) to the drivers and the drivers are responsible for the method of delivery and collection of payment. I don't agree with it but have been told that it is legit.
ReplyDeleteRiverrat
Accomack,
ReplyDeleteBrother, we send 1099's out every year before the end of January to subcontractors who make over $600.00 during that year.
I quote IRS Instructions on 1099 misc.
Due dates. Furnish Copy B of this form to
the recipient by January 31, 2008.
File Copy A of this form with the IRS by
February 28, 2008. If you file electronically,
the due date is March 31, 2008.
Riverrat
ReplyDeleteI can see sub contracting the delivery but the folks worked behind the counter and delivered. Some of the hours paid by "contractor check" were spent behind the counter as it was told to me.
Did the amount paid as a "contractor" equal the base hourly rate, or was it at a different rate?
ReplyDeleteWhat a cop out. If they are getting 1099's for contract overtime, doesn't that mean that the pizza giant doesn't have to pay extra for Social Security and Medicare as they do on their employees base pay?
ReplyDeleteThey need to head to the IRS office in Salisbury and have a chat. Basically a 1099 misc means the boss doesn't pay the tax, you do. So instead of being liable for 1/2 the employment taxes, you're liable for all of them. That can be a pretty big hit.
ReplyDeletebase hourly rate
ReplyDeleteIF they are paying "overtime" as an independent contractor, instead of as an employee, then they can be in deep doo-doo with the IRS.
ReplyDeleteAnyone of those kids who get such dual documentation from their "employer" can have their tax returns flagged by the IRS. Upon further investigation, the employer can be penalized for willfully disregarding employment laws.
Here is an interesting question: Were any of those 1099's issued for less than $600?
I know of a Salisbury auto repair shop that pays by 1099 to avoid ss tax and workmans comp.
ReplyDeleteJust my opinion, but I think the reason many business do this is because it costs so much money to pay for an employee. For every dollar that is deducted for taxes on your paycheck your employers must match that amount take both of those amounts and place it into a separate account to be paid on a quarterly basis, plus pay you your wages that you earned for the week. This is a lot of money. Small business's often wait till the very last possible minute before hiring someone. Then when they do hire, they stress the payroll every week.
ReplyDeleteSmall business was the backbone of this country. The Entrepreneur Spirit built our society and it is the entrepreneurs who becomes the most oppressed with and pays the highest price with these mandatory taxes.
This is the very reason that 'Corporate Culture' has homogenized the landscape of our country. You can go to any town in America see the same things you saw in the town you came from. You can buy the same clothes from the same store, and eat the same food from the same restaurants. The Mom & Pop stores and restaurants are nearly all gone. This because the volumes of customers are too low to make it worthwhile to have an employee, but the amount of people it takes to do so remains the same.
It is truly sad that we have allowed our government to tax our very soul as a nation right out of business.
The real issue is the self employment taxes these kids will be hit with. Although if they have a knowledgable accountant they will deduct mileage and car insurace, etc (assuming they were delivery drivers). Either way, 1099s are for non employees and there's no way of denying any of these people at Domino's are employees by IRS definition.
ReplyDeletePost this at the top of your article if you truly are here to report the truth in your local news blog. Your article was sent to us by our parent company Domino's Pizza LLC and their legal team since it was red flagged for response.
ReplyDeleteAt DP Salisbury LLC the ONLY people paid via 1099's are for sub contractors and employees that do other work outside the scope of their employment and/or job titles, example being a driver who may be part time is also an electrician and does some electrical work for us. We have NEVER paid a 1099 to anyone who was simply doing their job to avoid paying overtime, taxes, etc. The person you took the time to interview was either mistaken about their job duties or simply lying about our company. We do not send out W-2 or 1099 forms late. They are mailed on time but if a person has moved and not notified us, which happens ALL THE TIME, we can do nothing more than mail the forms to the last known address. We own over 17 locations in the Delmarva area and our parent company Domino's Pizza LLC would never allow such actions. We do know the laws and if you took the time to simply call our office we would have been happy to answer any truth based claims. Any further claims by anonymous sources will be handled properly to protect our business interests. We donate many hours, money, and other resources to various non profit groups, schools, childrens groups, churches, sports teams and events and we take our responsibilities to our communties seriously, as we live, work, and socialize here also.
Respectfully,
DP Salisbury LLC t/a Domino's Pizza
I worked there! I know the truth!!! DOMINO'S watch out for the IRS!! they'll be coming for you!!
ReplyDelete