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This is the blog of Be Your Own Lawyer! Here is where we try to post comments of current interest, toss around ideas about how and when people can represent themselves in legal matters, and chuckle from time to time about the legal system in America today.
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Tuesday, January 8, 2019
Sunday, December 23, 2018
Employee or Independent Contractor - the Proverbial Tar Baby
There is no way to talk about employment issues without
jumping headfirst into the muddy waters of employee versus independent
contractor.
To help understand recent developments, a bit of background
is in order.
Historically, there was no issue. Employers paid employees for
their time and labor. The amount depended on the relative bargaining power of
each and of course was almost always determined by the employer. The employer
simply paid a wage as low as possible that would still get people to come and
work. And lest you think I’m talking about ancient history, look again at Upton
Sinclair’s book, “The Jungle”
which was mentioned in a previous article. Those practices were the rule rather
than the exception. A worker received pay and that was it! No minimum wage. No
overtime. No insurance of any kind. Show up. Do your work. Shut up. Take it or
leave it.
We all know that things have changed. Federal and state laws
require employers to provide various benefits to employees in addition to requiring
the payment of a minimum wage and other compensation. There are even some that
argue that the pendulum has swung too far…that all these requirements sometimes
make it too costly for employers.
There is no doubt that employers face a lot of different
costs, in addition to actual wages. These include FICA (employers portion of
social security and Medicare), unemployment insurance, workers’ compensation
insurance, health insurance, and overtime pay to name a few.
When you consider that if a person doing work for someone
else, or a company is an independent contractor, all these costs go away, it is
easy to see why employers would like you to be an independent contractor
instead of an employee.
And there is the rub. While in the majority of situations it
is easy to determine the difference between an independent contractor and an
employee, there are an awful lot of gray areas. And it is in these gray areas
that you find both unscrupulous employers trying to “beat” the system, as well
as people that in good faith try to figure out on which side of the line they
should be.
Because of the gray areas, the courts have been trying to
define the differences for a very long time. Almost seventy-five years ago the
issue made its way the U.S. Supreme Court. In Board
v. Hearst Publications it held that:
"Few problems in the law have given greater variety of
application and conflict in results than the cases arising in the borderland
between what is clearly an employer-employee relationship and what is clearly
one of independent, entrepreneurial dealing.”
Nor have things gotten any easier. If anything, the issue
has become more complicated with modern technology. High speed reliable
internet has resulted in a major increase in the number of people working from
home. Moreover, employers continue to push the envelope, exploring every avenue
that will allow them to classify people that do work for them as independent
contractors instead of employees. Indeed, it has been argued that if some industries,
such as ride sharing (think Uber and Lyft), package delivery services, and software
developers to name a few, were forced to classify their workers as employees,
they would collapse.
Regardless of whether or not this is true, no one can
argue that more and more companies are coming up with business models that rely
on workers being independent contractors rather than employees.
So the challenge becomes to come up with rules and criteria
that will allow us to make the distinction in specific cases.
Some are easy.
The worker that goes to work every day, clocks in, or goes
to his office/cubicle, has a supervisor, works according to a schedule, and does
the work assigned by his employer, is an employee. No gray areas here. Nothing
confusing.
Now consider the flip side. You hire someone to come and
paint your house. He quotes you a price. You agree to pay a deposit with the balance
due on completion. He gives you a date by which the job will be completed. While
the project is underway there are days where he works all day. There are days
when he works a few hours a day. He provides his own supplies and equipment.
This man is clearly an independent contractor. Again, no gray areas. Nothing
confusing.
But in between those two easy examples, there is a
tremendously huge gray area.
Since the Supreme Court decision in Hearst, there
have been a lot of federal and state decisions in which the court has attempted
to set forth an objective test to distinguish between employees and independent
contractors. It’s not easy and there have been a lot of conflicting decisions.
The most recent significant decision has come from
California. The case of Dynamex
Operations West, Inc. v. Superior Court may be pivotal. Not only does the
court set forth objective criteria to determine whether or not an worker is an
employee or an independent contractor, it sharply restricts the circumstances
under independent contractor status will be found.
This case involved a lawsuit by drivers engaged by Dynamex
Corporation as delivery drivers. Dynamex classified the workers as independent
contractors, so they had no guarantee of receiving minimum wage, did not receive overtime
compensation, workers’ compensation coverage or unemployment coverage. The
workers sued, saying that regardless of what Dynamex chose to call them, they
were in fact employees, entitled to all the benefits and protections that other
employees received.
The court held in favor of the workers and fashioned the
A-B-C test, described as follows:
1. Part A: Is the worker free from the control and direction
of the hiring entity in the performance of the work, both under the contract
for the performance of the work and in fact?
2. Part B: Does the worker perform work that is outside the
usual course of the hiring entity's business?
3. Part C: Is the worker customarily engaged in an
independently established trade, occupation, or business of the same nature as
the work performed for the hiring entity?
These are tough tests for a person or entity engaging
workers to fulfill. They are even more difficult because the court also held
that the burden of proof is on the employer to establish ALL of these three
tests. Failure to establish even one of the three will result in the worker
being classified as an employee.
While it is true that the decision in this case applies only
to California, a review of the history of prior California decisions in this
area, and how they came to be adopted by other states and even federal courts,
suggests that this is the direction that will be followed in the future.
This decision will likely affect many of the industries that
make use of “independent contractors” such as ride sharing services, delivery
services and so forth.
What does this all mean to you? Well given that many employers
attempt to avoid their legitimate obligations by designating workers as
independent contracts as opposed to employees, it is not unreasonable to expect
that at some point you may find yourself in this position. Wanting to work for
some person or entity, but being told that you will not be an employee, but
instead an independent contract, and will be asked to sign documents to that
effect.
Despite the hype that may accompany such a request, it is
almost never to your advantage to be classified as an independent contractor.
You will not have any of the benefits or protections provided under state and
federal law to employees. You will be responsible for paying taxes that have
not been withheld. You will have to pay all of the self-employment tax where as
an employee you would pay only half. If you are hurt on the job, there is no
workers compensation coverage for you. When you are terminated there are no
unemployment benefits.
So what is your remedy?
You can, and should bring a claim for all the
benefits that you should have received as an employee. Back pay if you did not
receive minimum wage or overtime. If you get hurt, for all the benefits you
would have received under workers’ compensation. Payment of any self-employment
taxes you night have had to pay. In short, everything.
And don’t worry about whatever you may have been required to
sign saying that you are an independent contractor. Almost all states and
certainly the federal government ignore those “agreements” and look to the
actual relationship of the parties.
The pay-off can be substantial. Many states have punitive
provisions (up to three times actual amount) for unpaid wages. If there have
been any tax consequences for failure of the “employer” to withhold, you can
recover those. If you were injured on the job, you can recover all medical
bills and lost wages because the employer should have been providing workers’
compensation coverage. Likewise if the “Employer” is subject to health
insurance coverage for its employees but provided you none because you were an
independent contract.
The list goes on and on, but you have to be aggressive
and pursue your rights.
Remember, as with all of these issues, if you think you have
a claim or a grievance, Be Your Own Lawyer will always review it for you at no
cost.
Saturday, December 22, 2018
Now You're a Manager - Enjoy!!
The Fair Labor Standards Act, covering pretty much all
workers in the U.S. was designed to provide certain protections to workers.
This is the law that sets the federal minimum wage. This is the law that
requires employers to pay overtime for all hours worked over forty per week.
The protections provided by this law, as well as numerous state
laws, cost employers money. Most employers accept this as a cost of doing
business and comply with the laws. Other, less scrupulous employers, try to
avoid their obligations, and sadly, there are ways to accomplish this. That is,
an employer can save money on the backs of their employees.
In this article I’ll discuss the manager ploy. The Fair
Labor Standards Act, as do related state laws, contains exemptions. This law
was intended to protect regular employees, but in drafting it, Congress
recognized that to apply it to everyone, across the board could create
problems. Ergo, exemptions were put into place.
One such exemption is for
management employees. The Fair Labor Standards Act provides that the minimum
wage and overtime provisions do not apply to employees that hold bona fide
management positions.
Unscrupulous employers have jumped all over this exemption,
especially in lower paid, small operations, such as convenience stores, smaller
retail stores and smaller offices.
We call it the Now You’re a Manager game. But it’s not a
game. It’s a deliberate ploy to deprive you of what you are entitled to under
the law.
The good thing is, that the ruse will seldom stand up to
scrutiny. These employers are the poster children of the adage “a little
knowledge is dangerous”. They read, or somebody tells them that managers do not
have to be paid overtime or minimum wage and that is as far as they get. They
believe that by simply taking an employee and calling them a manager, they have
successfully circumvented the law.
And sadly, if you don’t know any better, and accept it, they
have.
There are thousands of employees working in small retail
outlets, small offices, and convenience stores who have been duped into
believing that they have actually been promoted, and are proud of the prestige
that comes along with the title “manager”. They do not realize that all they
have been given is the proverbial shaft, as they toil fifty and more hours a
week for a set “salary” that includes no overtime and when averaged out over
the actual hours worked, does not even come up to minimum wage.
To protect yourself, you have to know the complete law.
Yes,
the FLSA exempts managers, but they have to really be managers and that means
much more than some sleazy employer hanging the title manager on them.
So if you find yourself in this situation, that is you’ve
been designated a manager, but that position is in name only, what should you
be looking for and what should you do?
There is an old adage from the world of poker that goes
something like this…”when you are in a poker game and can’t figure out who the
patsy is in the first thirty minutes, you’re the patsy!”
And so it is in the world of “management”. If your title is
manager and you can’t figure out what the hell you’re managing, then you’re probably
the patsy.
So what should you be looking for?
Easy.
What are you doing
at work?
Are you doing administrative things, like setting schedules, doing
performance reviews of other workers, ordering inventory, or, are you out there
doing the same thing that everyone else is doing?
Are you making more money
than other employees when you factor in overtime and actual hours worked?
Do
you have real authority? For example, can you hire and fire someone, or do you
need your boss’s permission to do that?
If the answers to these questions are
coming up wrong, you’re the patsy.
So, what can you do? Plenty actually.
It should come as no surprise that this ruse has been tried
many times before, and in most cases not very well. A lot of employers are
under the mistaken impression that in order for an employee to be exempt from
minimum wage and overtime requirements, it is enough to simply designate them
as “managers”. Fortunately for you, life is not that simple. Federal and State
governments have formulated a number of tests to determine whether or not an
employee is a bona fide manager, and ironically, the job title is among the
least important.
So if you think you are a faux manager, in that position of
honor and esteem only so that your employer doesn’t have to pay you any
overtime, start by confronting your employer.
If that doesn’t work, and it probably won’t, you can file a claim for unpaid
wages with the labor department in your state, followed by a lawsuit under
either the FLSA or your state’s equivalent.
Be sure to keep careful records and copies of any and all internal
company documents and records that pertain to employment…not just yours but
other people doing the same kinds of work.
Just as with other things we warn your about, Be Your Own
Lawyer will gladly provide a free case review. So if you think you’re the
patsy, get in touch with us…we’ll look at what you send us and let you know if
you have a claim or not. There is no cost and no obligation.
Sunday, December 16, 2018
Are You an Employee or a Slave?? Some Employment Issues
Switching topics for the next few posts I’ll address some
employment law topics that may be of interest to you, regardless of whether or
are an employee, or an employer. Small business owners especially can benefit
from taking a look at some of these posts.
People have been working for other people, or for companies
as long as there has been recorded history. So the concept of trading one’s
time, expertise and effort for pay or some other reward is certainly not new.
What is new is the development of legal protections in the
form of rules,
regulations and court decisions that affect the
employer/employee relationship.
Historically workers had no protection. I mean NONE!
If you
worked all day and didn’t get paid, there was not much you could do against an
employer.
If you got hurt on the job, too bad.
If you had to work in hazardous conditions, so what?
If you weren’t getting paid enough, again, too bad – take it
or leave it.
If you think I’m kidding, read Upton Sinclair’s book “TheJungle” based on living and working conditions in Chicago in the early part of
the 20th century.
We all know that since then things have changed. We’re all
smug over the fact that there are “all” these laws to protect workers. We have
laws that spell out the minimum wage, how many hours a week people can work,
under what conditions they can work, etc., etc.
But as with anything, issues arise. Following the law and
dealing fairly with employees is expensive.
This should be obvious to anyone.
If you have an employee making $10 an hour, and that is all you have to pay
them, that is a lot cheaper than paying the $10, along with, unemployment insurance,
health insurance, workers compensation, overtime, FICA and so forth.
While most employers are reputable, honest and try to
deal with employees with integrity, the cost differential is great enough that there
is a segment of employers that have, and will continue to find ways to
circumvent the laws protecting employees. These people don’t care about their
employees. They want to spend as little as possible. The ways that they can
conjure up to avoid labor laws is limited only by human imagination.
In the next few posts we’ll talk about the protections that
workers have – an conversely, what you, if you are an employer must do – under applicable
laws. We’ll also discuss the tricks and gimmicks that unscrupulous employers
(or in fairness, employers that may not know any better) will attempt to avoid
those protections. We’ll also talk a little about what you can do if you think
you’re not receiving the pay, benefits, or treatment that you’re entitled to.
Remember that if you think that you are not being treated
fairly in your employment, Be Your Own Lawyer will always review your situation
and advise you accordingly at no cost.
Be Your Own Lawyer
Friday, December 14, 2018
KINDS OF FORECLOSURE HELP SCAMS – MORE FROM THE ROGUE’S GALLERY
In the last post we talked about scams that focus on getting
a homeowner to deed their property. Those really are less prevalent than
schemes that just take money, because let’s face it, it’s a lot easier to
convince someone to send you some money than it is to get them to deed their
home over.
So in this article I’ll focus on some of the more common
scams…those that just try to get you to pay money.
Phony Counselling or Phantom Help
In these, the scammer often represents that they have
expertise or a special relationship with your lender. They represent that upon
payment to them of a fee, they will negotiate a modification or partial forgiveness
of your loan. Of course they have no such relationship, and anything they
provide in terms of documents are what is readily available from government or
consumer websites at no cost. With these scams at best you are paying money for
something available at no cost to anyone. At worst you pay for a loan
modification that never materializes.
Equity Skimming
This is a variation of the phantom help scam, but more
damaging to you. Here you are not only told that the scammer is negotiating a
loan modification, but are persuaded to send monthly mortgage payments to the
scammer. You are assured that the money will be held in a special escrow account
as a sign of good faith while the mortgage is modified. Of course that never
happens. The scammer happily spends the money as soon as it is received. There
is no modification and because money that was intended to be applied to your
mortgage is paid to the scammer, your “hole” with the mortgage company gets
deeper and deeper.
Forensic or Securitization Audits
In these deals the scammer sells you on the idea (repeatedly
disproven) that if there is a flaw in the documents underlying the mortgage, or
in the transfer of the loan from one company to another, that you will be able
to stop foreclosure. It just “ain’t” so!! There has been a lot of press in the
past few years concerning failure to properly document loan transfers, “robo-signing”
missing documents, etc. These are all problems, but they are almost never
insurmountable problems. So yes, while it is true that a forensic or
securitization audit may turn up some issues, it is not realistic for you to
believe that because a document was not attached to a complaint, or an
assignment was improperly executed that your mortgage debt is going to somehow,
miraculously vanish. Yet you will be charged hundreds (sometimes thousands) of
dollars for an “audit” that is nothing more than a compilation of readily
available public records.
Bait and Switch
This scam is a little more blatant. The scammers tell you
that they are putting together a new loan for you…. One that will pay off your
existing mortgage thus eliminating the foreclosure. They conduct a “closing”
where you sign “loan” documents. In one version of this scam, buried in the “loan”
documents is a deed whereby you transfer title to your home. Following the “closing”
you are directed to make payments to the new “lender”. Of course your mortgage
is never paid off. The scammer collects your monthly payments, and may even
have the title to your home.
Conclusion.
Because of the large amounts involved, any issues related to
owning a home will always being the scammers out of the woodwork, like maggots.
While most people are honest, there is never any shortage of people willing to
lie, cheat, steal, or do whatever it takes to separate you from what is yours.
Because of the real estate crisis of the last decade, and because desperate
people will clutch at anything to save their homes, there is a tremendous
amount of misinformation and confusion…conditions in which scammers thrive.
Remember the old saying. If it seems too good to be true, it’s
not! If you owe money to a mortgage lender, with the rare, bizarre exception,
there simply is no “magic bullet” that will make the debt go away. Your
$250,000 loan is not going disappear because somebody didn’t sign something
correctly, or the current note holder can’t locate the original note.
Finally, remember that if you have any questions about any
foreclosure help, Be Your Own Lawyer will review them for you at no cost and
with no obligation.
Wednesday, December 12, 2018
Kinds of Foreclosure Scams
Now that we’ve
warned you a bit about mortgage foreclosure scams in general, let’s talk about
some specific scams to be on the lookout for.
First,
understand that there are two general kinds of scams out there that purport to
help you avoid or stop a foreclosure.
One kind of
scam is designed to get title to your property so that the scammer can strip
out whatever value is there. The second kind of scam just tries to get you to
pay money for one reason or another, for one frivolous “service” or another.
In this blog
we’ll look at the scammer that tries to get title to your property. Since once
a scammer gets the title to your property they can do with it as they please,
this is an incredibly dangerous scam. Not only are you deprived of your
property, but you lose the ability to pursue legitimate avenues to address the
foreclosure. And never forget the difference between a note and a mortgage. If
you no longer own the property a mortgage foreclosure may not be all that much
of a concern, but regardless of how the foreclosure turns out, you remain
personally liable on the note.
So how do
these scams work? As with crooks across the board, if you can conjure up a
scenario, it probably has been used or at least tried.
Typically a
homeowner with an actual or impending foreclosure is approached by someone
offering to help them with their problem. They point out that because a
foreclosure has been commenced (or the mortgage payments are way very far
behind) that the homeowner’s credit is not good enough to allow him to
refinance and pay off the loan being foreclosed. The solution? Deed the
property to an “investor” with sterling credit. For what appears to be a very
reasonable fee, they will then refinance the houses and then “sell” it back to
the homeowner. While this is happening the homeowner is allowed to remain in
the house as a “renter”.
Will that
ever happen? OF COURSE NOT!
As soon as
the “investor” has title to the property they will use it to their advantage.
If there is substantial equity in the property they will refinance it, or take
out a second mortgage, pocketing the money. If that is not possible, they will
rent the property (after evicting the homeowner). They may sell the property to
someone else on a land contract, charging a very low down payment followed by
monthly payments made to the scammer.
The common
threads of course are that the homeowner has lost their property, the
legitimate lender is not being paid and any value in the property, whether in
the form of financeable equity or monthly income goes to the scammer.
Since the
mortgage crisis of 2007-2008 there have been numerous government programs
instituted to help homeowners in trouble with mortgages. These usually involve
some form of re-negotiation of the mortgage, or arrangement to pay arrearages
over time.
The single
most important thing to know is that none of these remedies or programs… that’s
right NONE – not a single one, require you to transfer the title of your home.
So the
moment someone approaches you and even hints that the “way out” is to deed the
property to someone else, that should be a giant red flag and you should show
them the door.
As a reminder. If you are facing foreclosure, and if you are approached by anyone suggesting that you transfer title to your home, Be Your Own Lawyer, as a service to you, will review your situation, and advise you concerning any "help" offer you may have received, at no cost.
Wednesday, November 28, 2018
Mortgage Foreclosure Scams
There have been hundreds, no, probably thousands of articles written about the mortgage foreclosure crisis. Sadly though, not nearly enough has been written about the various scams that are out there.
It's a sad fact that whenever people have problems, face challenges, or experience pain, there are always those roaches coming out of the woodwork to take advantage of their plight.
And so it is with the foreclosure crisis. While the government has tried to help, the myriad of laws passed since the foreclosure wave started about ten or twelve years ago, has made the whole area a virtual feeding frenzy for crooks, con artists and swindlers.
Here are some things to remember:
1. You do not need any of these so-called "mortgage rescue" scams. None of these people have the proverbial "silver bullet" to make your mortgage go away.
2. A lot of the advice you will find is just plain wrong. For example as nice as it might be to believe, it is highly unlikely that the indebtedness on your home is going to magically disappear because of some minor technicality.
3. If a pitch sounds too good to be true, it probably is.
4. You do not need to pay anyone to get information about government programs such as loan modification. All of this information is available at no cot from numerous government websites.
5. There is never - absolutely NEVER any reason to do business with any company that offers to save your home by having you deed it to an "investor" or "trust". You can bet with near 100% certainty that any proposal like this is a scam. Don't fall for it.
All you need to do is google "foreclosure scam arrest" and you will see dozens of cases where scammers have been prosecuted, but sadly, not before taking millions of dollars from people ready to anything to save their homes.
Do not jump at any "easy" solution. There are none. Take time to research all the options. Research the foreclosure laws in your state carefully so you will have an idea of what you can and cannot do.
Finally, if you are considering any kind of foreclosure help at all, contact us at Be Your Own Lawyer. Our free case assessment will always include a review of any programs you are considering. Your case won't be our first rodeo in the foreclosure arena and without charging you a dime we can at least warn you about scams and get you pointed in the right direction.
It's a sad fact that whenever people have problems, face challenges, or experience pain, there are always those roaches coming out of the woodwork to take advantage of their plight.
And so it is with the foreclosure crisis. While the government has tried to help, the myriad of laws passed since the foreclosure wave started about ten or twelve years ago, has made the whole area a virtual feeding frenzy for crooks, con artists and swindlers.
Here are some things to remember:
1. You do not need any of these so-called "mortgage rescue" scams. None of these people have the proverbial "silver bullet" to make your mortgage go away.
2. A lot of the advice you will find is just plain wrong. For example as nice as it might be to believe, it is highly unlikely that the indebtedness on your home is going to magically disappear because of some minor technicality.
3. If a pitch sounds too good to be true, it probably is.
4. You do not need to pay anyone to get information about government programs such as loan modification. All of this information is available at no cot from numerous government websites.
5. There is never - absolutely NEVER any reason to do business with any company that offers to save your home by having you deed it to an "investor" or "trust". You can bet with near 100% certainty that any proposal like this is a scam. Don't fall for it.
All you need to do is google "foreclosure scam arrest" and you will see dozens of cases where scammers have been prosecuted, but sadly, not before taking millions of dollars from people ready to anything to save their homes.
Do not jump at any "easy" solution. There are none. Take time to research all the options. Research the foreclosure laws in your state carefully so you will have an idea of what you can and cannot do.
Finally, if you are considering any kind of foreclosure help at all, contact us at Be Your Own Lawyer. Our free case assessment will always include a review of any programs you are considering. Your case won't be our first rodeo in the foreclosure arena and without charging you a dime we can at least warn you about scams and get you pointed in the right direction.
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