1. I work as a per diem substitute teacher at a yeshiva in the US.
2. I asked for a w2, but they gave me a 1099 which forces me to pay all the 15% payroll taxes myself.
3. I explained to the Executive VP who made this decision, that according to the IRS, the criteria for being an employee is the work is done with supervision and with the employer’s materials
4. I explained that if I were a tutoring company that came in using my own lessons and materials, then I would get a 1099 instead, however, I use the lessons and books, schedule that I am told to; I take attendance; the teaching is on school property; the administration checks in on me, etc.
5. He responded that he thought that a sub gets a w2 only if he is a “regular employee” who substitutes for a class, not someone who is “randomly” called for per diem
6. He further said, that “even if I am correct and deserve a w2 instead of a 1099, what’s the big deal about paying something? It’s not very much. I wouldn’t bother about it, and would just pay it.”
He asked how much I made subbing last year. “So you have to pay $x.xx (calculates 15%) That’s nothing!”
7. Besides forcing me to pay the entire payroll taxes, I have an increased burden come tax time: I have to pay a larger sum than if deductions were made each pay check; I have to file Form ss8 with the IRS- an enormous amount of time and energy, and a chillul Hashem for the erring employer.
I have already addressed filing ss8 with a case with another yeshiva who issued me a 1099 instead of a w2 when I was the daily, regular teacher for the year (the IRS determined that I should receive a w2)
If the employer is wrong in issuing me a 1099, is he guilty of any and what halachot?
Example case: http://www.justanswer.com/tax/4jjz3-substitute-teaching-charged-penalty-when-filing.html
Being hit with the burden of paying more taxes than expected, is painful and nobody wants that.
On the other hand it isn’t clear that halachically the yeshiva is wrong. The basic rule with employer –employee relationships is that it depends on the “minhag hamedina” the local customs, and depending on what is being done now in the US will be the halacha. There is also another factor to consider here- that being that government regulations have changed very quickly in recent years and everything that the yeshiva does has to be reported, and the government can give them a hard time for anything, the custom in yeshivas might be to avoid having more regular employees. I am not saying definitively that this is the fact, rather that it isn’t clear.
That being the case, it would be a good idea to just leave the issue and let it go. I once heard that one of the gedolei hador said that he has never seen someone who was “mevater” (someone who gave in to the other side) and ended up losing because of it.
May you be blessed with much parnossa and everything you need.