My question involves independent contractors in the state of: Michigan.. Pennsylvania? Arizona?
This is my journey, from the very beginning until now. I apologize if there is unnecessary detail, but I want to be extremely thorough.
In mid June I received a phone call from one of the many remote positions I applied for. A woman asked me a lot of questions about myself, the position I was looking for, almost as if we were interviewing, and then sent me some emails to set up our “second” interview (or our first formal interview) via conference call with 2 sales managers and the HR director, as well as the recruiter who I had spoken with during the first ‘interview.’ The email she sent me informed me that the position was for a Customer Sales Executive, and she informed me during the first interview that it was an independent contractor position with no max hours.
I still have the position listing, it had information on it such as the schedule requirements
(20 - 40 hours per week [despite also listing “No Max Hours”; Monday - Friday: 8:00AM EST - 10:00PM EST (1 evening shift required a week / 4 hour shift; Saturday - Sunday: 9:00AM EST - 9:00PM EST (2 Saturdays a month are required / 4 hour shift; Must work in block schedules- 4 hour, 6 hour or 8 hour shifts) as well as the pay ($15.00/hour base plus weekly UNCAPPED commissions as well as weekly and monthly bonuses).
I took the job of course, because I am a full-time student with no experience outside of customer service, and I wanted mostly evenings. I will admit that at the time I did not know much about independent contractors, except you do your own taxes. I needed a job, so I figured it must not be that hard, I would investigate it later. Well, I have begun to investigate it – as well as learn a lot more about what my job actually entails- and I am wondering if I should have ready over the paperwork more carefully. I don’t think I AM a 1099 contractor, but I hope someone can help me clarify.
After going through the second interview, I was asked to read their guidelines, sign a ton of paperwork, sign a “Authorization to Release Criminal Information for Employment Purposes,” complete my direct deposit paperwork, sign a 1099 and W9.
I was sent a signed letter, from their Human Resources Director, welcoming me to the company. Some things mentioned in the letter were:
The name of the individual I will be reporting to, as well as my hourly pay ($15, as listed above) and that I will be paid weekly. They stated the day they would like me to start work, as well ass the name of the individual to report to for training and to forward the ton of paperwork to. The also included a list of my benefits- 5 unpaid & unscheduled personal days, 5 unpaid sick days, and 5 unpaid and scheduled vacation days per quarter, that can roll over. I was confused because I was told I would be making my own hours (within the guidelines). This hasn’t been an issue so far- but I am still a level one. More on that later.
So I received the “New Hire Packet” which included inside the “Employee Handbook.” I skimmed this, as it seemed pretty standard, nothing eye-catching or out of the ordinary. However upon reading now, I notice that it uses the term “employment” an awful lot. I don’t know if this is standard or contradictory, or if I am being overly pedantic. One of the first things in the handbook is defining the “Employment Relationship.” It states, as most other (employment) jobs I have worked, that “ Your employment with the Company is “at-will.” You are free to resign at any time, for any reason, with or without notice. Similarly, the Company is free to conclude the employment relationship at any time, for any reason, with or without cause or notice.”
The handbook also goes on to describe “Employee Benefits and Services.” Some of the listed services are: Bonuses, paying for VOIP services (which I am pretty sure is free anyway), workers comp, military or family leave, further clarification of the previously mentioned days off, and leave of absence. This section was prefaced with “The descriptions of employee benefits and services in this handbook are only brief summaries for your general information. Contact the Human Resources Department for more details.”
It says you must contact the co-owners of the company before speaking with the media, as well as not solicit employees on company time, or distribute company literature outside of the workplace. You can also only use your work email for work. “Working time” means only when you are not actively working, and not breaks or time before and after work. This seems standard to me, but is it standard for contract sales jobs? Literally no clue.
Next, it goes on to list “infractions” that may require disciplinary action depending on the severity. The vague list includes: “Falsifying employment application, timecard, or personnel or other Company documents or records; Failure to maintain an adequate reliability rating as determined solely by the Company (Reliability being the percent of time you showed up at the scheduled times); engaging in acts of dishonesty, fraud, theft, or sabotage; threatening, intimidating, coercing, using abusive or vulgar language, or interfering with the performance of other employees; insubordination or refusal to comply with instructions or failure to perform reasonable duties which are assigned; unauthorized use of Company materials, time, equipment, or property; damaging or destroying Company property due to careless or willful acts; conduct which, in the Company’s opinion, reflects adversely on the employee or the Company; performance which, in the Company’s opinion, does not meet the requirements of the position; engaging in such other practices as the Company determines may be inconsistent with the ordinary and reasonable rules of conduct necessary to the welfare of the Company, its employees, or customers; other circumstances for which the Company feels that corrective action is warranted. "
They go on to describe in more detail other standards of conduct. The first is attendance and scheduling
“Being ready and available to work at the time required is essential for good job performance. All Company employees are responsible to maintain good attendance, punctuality and high productivity during the times they are scheduled to work. When attendance becomes a problem, disciplinary action may become necessary, up to and including termination of employment. The Company has established certain procedures that deal with notifying your supervisor concerning your absences.”
All Company managers have a set number of committed hours that the Company has approved. All Company Associates are required to work a specific number of hours per week. These requirements are necessary because of the time-sensitive nature of the work we perform and the clients that we serve. The Company tracks the actual hours worked versus the committed hours worked to establish a reliability rating for each Employee. These reliability ratings impact Company decisions concerning campaign assignments, advancement and continued employment.”
So this is where I get super confused. From what I understand, if a contractor gets the job done, they don’t need to work a set number of hours. So if I want to leave early and I am meeting my quotas, do I, as a contractor, need to ask permission? I understand if you have committed to work a certain day and you don’t show up, that probably violates a contract. But if I just finish up 15 minutes early (which elsewhere they have listed as the time that is punishable or needs approval) then I need permission..?
They also essentially state that I need permission to work with another company-
“ We expect our employees to conduct business according to the highest ethical standards of conduct. Employees are expected to devote their best efforts to the interests of the Company and the conduct of its affairs. Business dealings that represent, or appear to represent, a conflict between the interests of the Company and an employee are unacceptable. The Company recognizes the right of employees to engage in activities outside of their employment which are of a private nature and unrelated to our business. However, a policy of full disclosure must be followed to assess and prevent potential conflicts of interest from arising. Contact either Co-Owner if you have questions regarding a possible conflict of interest or outside work. Outside work cannot interfere with your employment with the Company.”
At the very end of the handbook, is finally a page I had to sign. This was prefaced with “I acknowledge receipt of COMPANY Handbook. I recognize that this Handbook, with the exception of the provisions set forth below, is intended for information purposes and does not constitute a contract for or terms of employment between the Company and me.”
So, my interpretation of that is, that neither of us have to hold to that. Like, I do not have to follow those rules, nor do they need to offer benefits. It is strictly informational. Is this correct? The provisions below mentioned, are standard legal things in an employee handbook: FMLA info, disability accommodations, as well as 2 I want to really mention. One is again, employment at will. They go into the description of employment at will, that they can fire me for any reason, I can leave, they may change the rules and policies and I must adapt. Also “Limitation on Claims.” “I agree that any claim or suit against COMPANY and/or its agents, including but not limited to claims related to my application, employment or separation from employment and claims arising under State or Federal civil rights statutes, must be brought within the following time limits or be forever barred: (a) for lawsuits requiring a Notice of Right to Sue from the EEOC, within 90 days after the EEOC issues that Notice; or (b) for all other claims, within (i) 180 days of the event(s) giving rise to the claim, or (ii) the time limit specified by statute, whichever is shorter. I waive any statute of limitations that exceeds this time limit.” No idea what this means, but it sounds like it is intending to screw me over.
It also says that all laws and agreements are made in the state of Michigan, which is quite strange because that is NOT where my company is located.
They sent over a bunch of other papers (background checks, credit checks, they might record my calls sometimes) - sometimes referring to me as a Contractor, sometimes referring to me as an employee.
I then had to sign a non-competition agreement stating that for now and 2 years following my employment, I cannot work for anyone directing competing with my company. (I don’t think this will affect me as I have no sales history or interest outside of this job, and my company is so random and niche, and outside of my industry. BUT. I am a contractor. Can I not work for who I want?)
Within the non-competition agreement, it also states “During the term of Employee’s employment with the Company, Employee may not hold any job or engage in any activity for economic benefit outside Employee’s employment with the Company, unless that job or activity has received prior written authorization from Employee’s immediate supervisor and either co-owner. The Company may, at its discretion, allow an outside job or activity if Employee can meet the requirements of employment with the Company and the job or activity does not conflict or compete with any activities of the Company. If the job or activity does not meet these requirements, Employee may be required to terminate that outside job or activity.” They also double down here on the “at-will employee” thing.
They go on to state
“ Therefore, in the event of a breach or threatened breach of any term of this Agreement, the Company will be entitled to temporary, preliminary and permanent injunctive relief without any requirement of bond, in addition to any other legal or equitable remedies to which the Company may be entitled. If Employee engages in any breach of paragraph 2 prior to the entry of a court order prohibiting such conduct, then the two-year non-compete period under paragraph 2 will be extended by the same period of time that Employee engaged in the breach prior to the entry of the court order. Employee shall be responsible to pay for the actual costs and attorney fees incurred by the Company in the enforcement of this Agreement. In the event that a violation of this Agreement is established, Employee shall pay to the Company an amount equal to one year of Employee’s most recent annual salary, which the parties agree is a reasonable estimate of the Company’s damages related to its investment in Employee’s employment and training on account of a breach. This amount shall be in addition to the Company’s right to recover actual damages for any actual loss of business or opportunities on account of such a breach, and any other remedies allowed by law.”
I also don't know what this means, but it sounds like it is meant to screw me also.
Moving on to the next paper, which covers work time. My trainer explained that all we should really be concerned about is our “reliability,” which is, did we work the number of hours we said we would. So sometimes my break runs a bit longer – or I don’t take one at all- and don’t tell anyone because I am working to meet my quotas, and that is it. But here is the paper I stupidly did not read carefully.
“An Independent Contractor is deemed absent when he/she is unavailable for work as assigned/scheduled and such time off was not scheduled/approved in advance as required by department notification procedure. In the event an Independent Contractor is unable to meet this expectation, he/she must obtain approval from their supervisor in advance of any requested schedule changes. This approval includes requests to use appropriate accruals, as well as late arrivals to or early departures from work.
An Independent Contractor is deemed to be tardy when he/she: Fails to report for work at the assigned/scheduled work time. Leaves work prior to the end of assigned/scheduled work time without prior supervisory approval. Takes an extended meal or break period without approval. Each Independent Contractor is expected to be early (or at minimum, on time) each day to their shift. Any time past 5 minutes at the beginning of their shift will be considered late. For example, if their shift starts at 8:00am and they arrive at 8:06am, they are considered late. This is not the expectation every day and will not be considered acceptable behavior if the Independent Contractor is consistently late. All time is tracked and will be discussed with the Independent Contractor if abuse is prevalent.
Time Clocks and Failure to Clock in / Out:
Independent Contractor are required to follow established guidelines for recording their actual hours worked. A missed clock in/out is a violation of this policy and includes: Failure to clock in/out on their designated time clock at the beginning and/or end of their assigned shift, as well as for breaks and lunches. The designated time clock is through the Open Time Clock system. Employees must clock in and out from their work desk only, no other exceptions are allowed. Failure to clock in/out on their designated time clock for the meal break. Failure to accurately and timely report time worked Clocking in/out early (or late) of assigned shift without prior approval "
This part is also SUPER confusing to me, because we don’t clock in/out. We just are paid when we are working. Other conversations with my supervisors have shown a much more lax attitude. For example, I wanted to do something on my day off, and higher ups told me its fine, I don’t need approval to do that, as long as I work at least the # of hours required to work.
I definitely do not think they are strict about this, because it states that if you are a ‘new hire’ (I believe the new hire period lasts 4 weeks and violate this policy twice you get a written warning. I have been early or late by 5 minutes every single day but I have the correct # of hours worked (reliability) which is what seems to matter to them.
There is then a SEPARATE paper which is the code of ethics specifically for contractors, which prohibits you from using your cell phone during work, clarifies that you must let your manager know by phone 1 hour before your shift if you will be late or absent, and stating that you get a 1 – hour lunch (to do errands, eat lunch, whatever, it’s unpaid.) We actually get to schedule however long we want of a break, we just have to let them know in advance. (So if I work 6 hours but want a 30 min break, I schedule myself 6.5 hours).
So moving on to what really got me thinking about “Is this legal and normal??”
I signed a paper that stated my first four weeks are a “qualification period.”
“Our expectations for our Independent Contractor performance will include the following:
Follow the skeleton scripting that we will provide to you
Maintain a reliability rating of at least 100%
Attend all mandatory training sessions
Follow our company’s core values
Follow all campaign procedures”
Hey sounds good and reasonable, right? Wait, what is mandatory training sessions?
Hm, wish I had asked!
During (paid 25-hr) training, I was told we had (optional) weekly conference calls that were simply informative of the industry we work in, and weekly video chats to sort of share info / bond as a workplace / whatever. My trainer heavily emphasized that they are NOT mandatory, and they cannot make them mandatory to us as we are 1099 employees, but they are strongly encouraged to ‘improve our craft.’ They do role call, we need to submit an excuse to our manager if we are not there, and if we are not there, it affects our metrics which are measured weekly, monthly, and quarterly. The attendance for company calls and training must be at 100%. Our trainers and sales managers also spring on us impromptu “meetings,” aka phone calls where they provide feedback as to how we could better follow the script. These feel constant, they could easily be handled over email, and it is frustrating because the only time we get paid is time on the phones. So if I schedule myself for 6.5 hours (6 hours with a half hour break) but my boss needs to talk to me for half an hour, I need to make up that half hour or it affects a) my training attendance and b) my reliability because I will have only worked 5.5 hours.
I have since received an email from my supervisor (sent to all sales people). As mentioned earlier, we make our own hours within specific confines that they allow, and when we do that we must schedule in time for our breaks. And as I just mentioned, if supervisors or sales managers need to have phone conferences with us, it cuts into work time. So the email said "If you are on schedule for a certain amount of hours you are to work that block of hourS. I am seeing some people pick a 6 hours shift but only work 4.5-5.5 hours not the full 6. I am also seeing people take long breaks for a 4 hour shift which causes them to only cover 3-3.5 of the 4 full hours. Your calendar on the home page in the CRM will show you how much you worked and the total time you are on schedule for which you selected to work. We need to be able to rely on you to cover the phones for the hours you pick to work. If you cannot work a full 6 hour shift, do not select one. This should be treated like an in office position. You do not get to come and go as you please. "
So if you've made it this far... am I being treated too much like an employee? Is there any benefit to doing anything? I don't want to waste time doing anything about this if it will not be financially beneficial to me, to be honest. Do I sue? Or what would you do in this situation? Anything?:confused: