What should my friend do? (Shady payroll practices at his new job)

In My Humble Opinion
21

It sounds like your friend does not qualify as an independent contractor.

If the boss is really his friend, I’d document everything and have a talk with the guy, telling him that he’s going to be in deep crap unless he straightens up. This is for the good of the boss, who sounds like he’s not evil, just incompetent. If the boss brushes him off, then do the more drastic measures. But I’d make sure the check clears (you can wait and not pay bills until it does) and check on the insurance right away.

22

The fact that the check is handwritten is also a red flag. Companies have to keep records of all monies paid to employees. Tell your friend to keep copies of the checks before he cashes them.

23

[QUOTE=Voyager]
It sounds like your friend does not qualify as an independent contractor.
.
[/QUOTE]

Actually the OP hasn’t been all that forthcoming about the type of business:
*"I don’t want to say what industry it’s in or anything, but he got a job that deals with his #1 hobby in a field that it’s usually impossible to get jobs in.

This is an office job in a legit business, not some sort of auto garage…"*
It is quite possible to have an “office job in a legti business” and be an independent contractor.

Here are the 20 “tests”:
http://www.missouribusiness.net/docs/20_tests_employee_contractor.asp
Which have the OP said his “friend” meets?
Here are the “5 tests”
http://www.twc.state.tx.us/news/efte/independent_contractor_tests.html
*the degree of control exercised by the alleged employer;

the extent of the relative investments of the [alleged] employee and employer;

the degree to which the “employee’s” opportunity for profit and loss is determined by the “employer”;

the skill and initiative required in performing the job; and

the permanency of the relationship.

(quoted from Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042 (5th Cir. 1987*"
Which of these does the OP’s freind meet?

All we are doing is guessing. In order to to even have an educated guess about Independent Contractor status, the OP has to give us *hwaaaaay * more information.

24

[QUOTE=Annie-Xmas]
The fact that the check is handwritten is also a red flag. Companies have to keep records of all monies paid to employees. Tell your friend to keep copies of the checks before he cashes them.
[/QUOTE]

Hardly. I have seen multi-million dollar businesses that still do this. My Bor, who is a Tax Preparer, does the taxes for several perfectly legit, but somewhat Luddite small businesses that still do all their checks by hand.

25

[QUOTE=DrDeth]
Actually the OP hasn’t been all that forthcoming about the type of business:
*"I don’t want to say what industry it’s in or anything, but he got a job that deals with his #1 hobby in a field that it’s usually impossible to get jobs in.

This is an office job in a legit business, not some sort of auto garage…"*
It is quite possible to have an “office job in a legti business” and be an independent contractor.

Here are the 20 “tests”:
http://www.missouribusiness.net/docs/20_tests_employee_contractor.asp
Which have the OP said his “friend” meets?
Here are the “5 tests”
http://www.twc.state.tx.us/news/efte/independent_contractor_tests.html
*the degree of control exercised by the alleged employer;

the extent of the relative investments of the [alleged] employee and employer;

the degree to which the “employee’s” opportunity for profit and loss is determined by the “employer”;

the skill and initiative required in performing the job; and

the permanency of the relationship.

(quoted from Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042 (5th Cir. 1987*"
Which of these does the OP’s freind meet?

All we are doing is guessing. In order to to even have an educated guess about Independent Contractor status, the OP has to give us *hwaaaaay * more information.
[/QUOTE]

I agree with this one. We are making too, too many assumptions based on much too cryptic information. All we know is that the employee works, and gets a handwritten check. I can’t recall if an employer is required to provide YTD on a payroll check or not. Maybe the boss is just trying to get things rolling before hitting your friend up for taxes. He did, after all, have the forms on hand.

I would, however, as previously recommended, cash checks at issuing bank rather than depositing them, and keep money set aside to pay income taxes in case boss gets into trouble. I would NOT call any “authorities” and report boss, because he may not be breaking any law, and your friend may then see a longer work hiatus than 9 months.

hh