[splitimage]

I have a dilema. I interviewed for a job as a senior accountant on Friday, and I think the interview went well. I think there's a good chance that I'll be offered the job. But the company is doing something that skirts the edges of legality. To avoid paying payroll taxes, the employer health tax, and workers compensation insurance they don't have any employees, everyone who works for them is an "independant contractor". So if they offer me the job, I'd have to set up as a sole proprietorship and register for a HST number - I'd basically become self employed with only one full time client. There are some slight advantages to doing this as there are a bunch of thins I'd be able to deduct as business expenses from a tax perspective that I can't deduct now. The big downside is if they decide they hate me in 6 months or a year, I wouldn't be eligible for employment insurance. So it's kind of high risk.

Plus if I take it, once I register as a sole proprietorship, there's a bunch of regulatory stuff I have to go through with my accounting licencing body. I'd have to take some mandatory courses, all of which cost money, and I'd have to take out practice liability insurance which while I could deduct it from income as an expense for tax purposes, I really don't have the money to pay for it now.

But I'm kind of stuck. I really need a job, my savings will only last through Sept. and then I have to start taking money out of my retirement savings account.

It would be a good job, from a recovery perspective for where I am now, as it's a bit junior to what I'm qualified for so it would be easy for me. It offers great flex time, which would allow me to keep going to addictions aftercare, and to do the stuff downtown that I need to do 3 days a week. I figure I could be in the job for a year or so and then start looking for something permanent where I'd actually be an employee.

Just the lack of employment insurance scares me. And I'm not sure I want to work for a company that's operating on the edge of the law.

It just pisses me off too that more and more companies are doing stuff like this to get out of paying payroll taxes, and giving employees benefits and retirement plans.

It's really hard to know what to do.

--splitimage

[MyBrainHurts]

It sounds like a good opportunity Split. If it didn't work you can always go back to unemployment if you have it now. You can still look for other jobs while you are there and leave if you find something else. Why do you have to worry about regulatory stuff? I would think for most cases you don't, unless the company you go to requires you to keep up your CPA or Tax CPE.

Hello, splitimage. As I am sure you are aware, the IRS has a thing about independent contractors.

http://www.twc.state.tx.us/news/efte...s_ic_test.html

[unaluna]

I think she's canadian, i'm not sure where they stand on this now, I used to work with canadians, eh? but yeah, they really pulled it tight in the US.

[Perna]

My husband (an engineer) did this; it's been pretty standard for quite awhile; my brother actually got other independents working "for" him, he does their accounting through the Department of Treasury they all work with and pays them through his company, keeping a cut of what their "salary" is; you might look into doing that if there are other independents out there who don't want to form their own companies; you form the company and subcontract them to the company/their company! Would be great seeing as how you're an accountant.

PM me if you want my brother's name/site address and you can ask him about it; like I said, he does accounting-related stuff for the Department of Treasury in D.C., can't get any more "legit" than that :-) I did it for 3-4 years back in the 1970's-80's for law firms.

[splitimage]

Thanks guys, but yes I'm Canadian. So different laws apply. What the company is doing now is operating in a grey area. If they were ever audited by the Canada Revenue Agency I'd say it's 50/50 as to how the CRA would rule on the tax evasion question.

If I register as a sole proprietorship, I automatically become self employed and lose employment insurance benefits. I can voluntarily opt into the employment insurance program and pay into the benefits scheme, but I'd only be eligible to collect under two circumstances, parental leve benefits if I became pregnant, or sick benefits if for some reason I became unable to work, say for example I had to repeat rehab or go inpatient again. Basically I have no job security in this scenario, and no safety net if they get rid of me so I need to really think it through.

As for the regulatory stuff - I need to do it to maintain my accounting designation, and I need to maintain it. First off I worked too hard getting it to let it lapse, and everything except the most basic bookkeeping jobs require a designation, so I'd have to go through the whole process with my accounting society's governing body.

Lots to think about.

splitimage

[Perna]

Just make sure you comply with "G." and the "four-fold" test?

http://www.lbwlawyers.com/publicatio...employment.php