Are You Ready to Be a 1099er?
While the Bureau of Labor Statistics (BLS) reported a 6.1% unemployment rate for the month of June, job scarcity remains a sobering reality for millions of people around the country. This has been compounded by a growing trend that more and more companies are embracing, which is jettisoning the responsibility of paying employees’ taxes and requiring workers to become independent contractors to be hired for work. This includes federal and state taxes, FICA (Federal Insurance Contributions Act), which is paid into the social security system, and withholdings for health insurance and retirement. If a person is hired by a company as an independent contractor, she/he is responsible for paying the aforementioned taxes and withholdings and, submitting Form 1099 to the Internal Revenue Service (IRS), which is the name from which “1099ers” is derived. This financial responsibility, in more instances than before, is becoming more common in workplaces around the country and is affecting people across profession, region of the country and level of education.
Independent contractors have been around for a long time but with so many more companies now embracing this method of hiring workers, there will be far more people who will be required to become 1099ers to gain access to jobs than in previous generations. This represents an abrupt and, for many, unwelcomed change to the employment landscape in America. For some workers, managing the financial responsibilities of being an independent contractor is a way of life and the ideal situation, but for other workers, it could represent a level of responsibility i.e., putting aside and paying the correct amounts for taxes and other withholdings rather than spending an entire paycheck, that simply is not desirable. It seems, though, that 1099er status is here to stay and will be a position that more and more people will be required to adopt if they want to work. The question is, “Are you prepared to embrace this change?”