Last year at my place of work, an IT support person volunteered to photograph some items for our website. He’s a full-time salaried employee, but invoiced for his labour on the photos.
At the time I thought nothing of it, but today it popped back in to my head, and I thought…
Hang on a minute. A salaried employee billing as a contractor? What are the laws on that?!
I’m pretty sure if my boss came to me and asked me to do some photocopying, that I couldn’t hang around and do it after work, then bill for it as a contractor, could I?
Yes they can, I did this when I was the system administrator at a hotel I worked at.
I had some part time work as a side line, where I would teachpeople about computers and XHTML.
The boss tried to say, “Hey that’s something we could use at our hotel. You should do it.”
Of course since I was salary he tried to get me to do it for free. I pointed out I wasn’t on a bonus system, and my job was to run the systems of the hotel. So while I was perfectly happy training people on that software or even training for Excel or MS Word, not all software comes under that heading.
So he billed me seperately. He would also do this for one of the admin asst, she made really beautfuly cakes and such. She was salary so she’d bill him whenever the hotel needed a specialized cake for a function.
The problem usually is the other way, the companies don’t want to pay you extra.
A salaried employee usually has their job duties spelled out very specifically so the Boss can’t claim cleaning the office kitchen is now part of their job.
Any non-specified work is usually given as a contract with additional monetary compensation.
I really disagree with this. A salaried employee quite frequently has “other duties as assigned” in their job description so that if support staff are cut, the operation can continue. Assuming that by salaried we mean FMLA-exempt, those employees can be asked to do any darn thing for any number of hours. If you’ve been lucky so far, good for you.
The assumption that by salaried we mean FMLA exempt is also important to the OP. If the employee is exempt, the contractor situation really isn’t a problem. The employer probably could ask the employee to take the photos and not pay extra. In this case, apparently the employer is not being a jerk. Since the employer presumably would be paying a contract photographer anyway, he is hiring this employee as a contractor–but the arrangements are completely separate.
The situation gets more complicated if the employee is FMLA non-exempt (hourly). Then it could be argued that the employee is entitled to overtime at time and 1/2 for the time spent taking the photos. The earnings as a contractor might be less than time and 1/2. It could still be done, BUT there would be a lot more scrutiny to the effect that the photography was completely out of the scope of the employee’s regular job duties and was truly handled as an independent contract. Most employers I’m familiar with would not take that risk with a non-exempt.
The reason the OP can’t bill as an independent contractor for making copies (assuming he is exempt) is that there’s no reason for the employer to pay him extra to stay late and make copies. If he is non-exempt, the employer would have to pay him overtime. Making fake “independent contractor” arrangements to save on the overtime would put the employer at legal risk.
I don’t have the energy to do the research right this moment (though I can later), but the issue is really going to be one of 1099s and W2s. The question is, can a regular employee be given both a w2 AND a 1099 from the same company? I believe there are situations where doing so is perfectly kosher (I think the OP would be okay, IIRC it has to do with the w2 work and the 1099 work being very different), but I think in some cases it’s not allowed. If the 1099 work should have been classified as w2 work the employer will be held responsible for the taxes. Whether or not they can collect them from the employee, I don’t know. If you troll around on the irs.gov website you can probably find alot of the answers in the publications.
What **Harriet the Spry ** said. There’s no law against a salaried employee getting a contract with the employer to do additional work. And contrary to what **Annie-Xmas ** says, most salaried employees (exempt or non-exempt) do not have specific employment agreements–the employer can assign that employee to do whatever work it wants to. The one risk the employer faces in tacking on different job duties is that those assignments might change the character of the employee’s job sufficiently to shift them from exempt to non-exempt and have to start paying overtime.
This is not my experience at all. FMLA exempt has nothing to do with being a salaried employee. The major effect FMLA exemption has (in my experience) is an exempt employee can perform uncompensated overtime and when compensated will receive regular rate. A non-exempt employee can’t do either which kind of sucks for them as they aren’t at the top of anyone’s list for OT. A salaried employee (in my understanding, I have never dealt with one), does not bill by the hour. They receive a constant payment regardless of the number of hours worked. For instance, if things were slow, a salaried employee might go home early without impacting the paycheck. Conversely, they stay until the work is done. We have both FMLA exempt and non-exempt employees and we all definitely bill by the hour-from the secretary to the president. People in both situations might have pretty a easy time billing-it is all overhead, but each hour is billed.
That’s not really true. The Boss can pretty much ask you to do anything (unless it’s illegal or unethical). Theoretically, they should have more important stuff for me to do than cleaning the kitchen on my salary.
FMLA exemption has nothing to do with being a salaried employee - TRUE! However, it is *extremely *common for people to say salaried when they mean exempt, and I believe the OP did just that. “Salaried” is not an especially meaningful term–it’s whether FMLA applies, or if the employee is exempt from that law that matters. There is a fairly rare and complicated payroll arrangement called “salaried non-exempt,” (that might be what you’re talking about, see here http://www.twc.state.tx.us/news/efte/h_regular_rate_salaried_nx.html) but it doesn’t change my original point–exempt employees can contract with relative ease, contracting for non-exempt employees (whether salaried or hourly) is unlikely.
**An exempt employee can perform overtime and receive anything or nothing **to compensate them for it. There is no law requiring any compensation for an exempt employee working more than any number of hours.
The rest of your paragraph doesn’t seem to represent any type of standard US payroll arrangement as far as I can tell.
Not sure why this would be an issue. The person in question performed additional duties above and beyond the normal scope of his job, and was compensated for it.
When I was a programmer, we were required to provide support for our production systems, which ran from about 10pm to 6-7am. If we got called, we got x amount of money or paid time off as compensation.
I can think of a lot of other situations where a salaried person would do work that they got paid separately for.
The real issue is going to be the taxes. As an employee receiving a paycheck,you’ll have taxes withheld, the employer will pay half of the social security taxes, and you’ll receive a W-2. As an independent contractor, if you receive more than (I think) $600 in a year you’ll receive a 1099 MISC, no taxes will be withheld, and you will have to report it as self-employment income and pay both parts of the social security tax. This issue will be eliminated if the employer simply adds the pay for the extra work to your paycheck
I worked at a couple of places where this was standard practice and the reason was simple.
The budget that paid my salary wasn’t paid for by the other project.
When I worked in advertising, my salary was paid by the clients I worked for. The agency had other clients, and other teams working on them. If one of those teams needed my services, they had to pay for it. Sometimes a “trade” of services or budget could be arranged, and I could work on the project on company time. But if the paperwork couldn’t be handled internally (e.g., if my clients expected I would be continuously available to them during business hours) then I’d have to do the work on my own time, and was compensated above and beyond my regular salary for it.
It’s true, both checks came from the same company, but they were from separate pockets.
FWIW, salaried employees of the federal government (in the US, anyway) are specifically prohibited from receiving additional compensation for duties that are related to their job, whether from the government or elsewhere. I think hourly employees are also subject to similar restrictions. Feds are also banned from doing other work for the government, even if it’s clearly outside their usual job duties. Until recently, Feds were prohibited from receiving any additional compensation without a fairly thorough ethics review. Rigorously interpreted, that meant that you could not even receive compensation for being the organist at your church, for instance. That’s since been opened up quite a bit, but there are still quite a few restrictions regarding outside work. As with many rules, this seems to be enforced at increasingly decreasing rates as one’s level in the organization increases.
For payrol it depends on how the salary is set up. When I’ve done payroll for companies I’ve almost never seen it done where the employee isn’t paid “technically” for 7 days per week.
For instance, punched employees (wage earners), get paid on the payroll for a 5 day 40 hour work week. Salaried employees are set up in the systems at 7 days 5.715 hours per day. Of course no one but the paymaster ever sees this, but it makes a difference on some bonus and insurance plans. For instance I did bonuses for one worker and he was getting a huge bonus but it was calculated by year’s end and day’s worked. The year eded on a Sunday. He calculated his bonus to include 40 hours, but it only included 5.715 hour because it went by actual days.
Just because you are exempt doesn’t mean your employer doesn’t have to pay you overtime. It’s complicated and varies from place to place, but there is even a whole industry of lawyers specializing in suing employers for salaried employess when they are put in as exempt but aren’t.
I think you meant to say just because you are salaried–instead of exempt–and that’s true. Only some employees can qualify as exempt–and paying a salary to an employee whose duties don’t meet an exemption does not excuse the employer from paying overtime.