Agent Leaves and Now Files for Unemployment

[jacobtn]

I started a thread the other day about an agent who decided he could do it on his own after I trained him and set him up at a high commission level. Now I get a letter from the labor and workforce division where he has filed for unemployment, and listed my insurance office has his place of employment. WTH? He was a commission only agent, paid direct by the company except for a couple grand that I paid him and 1099ed him for. I assume I need to inform Nashville of this, as I don't want them to come after me for not witholding?? Good lord.

 

[VolAgent]

Another pitfall of recruiting...

Did you have a contract with him? Anything spelling out he was an independent contractor? Did you supervise and monitor his work and act in the role of employer and boss?

Who knows if he will win, and probably not. But potentially a great move. If he can demonstrate he was an employee, you'll have more than just unemployment tax to worry about.

I hope you kept some records showing he wasn't an employee of yours?

 

[STIBROKER]

and tell them he was part time help.....

 

[Crabcake Johnny]

I started a thread the other day about an agent who decided he could do it on his own after I trained him and set him up at a high commission level. Now I get a letter from the labor and workforce division where he has filed for unemployment, and listed my insurance office has his place of employment. WTH? He was a commission only agent, paid direct by the company except for a couple grand that I paid him and 1099ed him for. I assume I need to inform Nashville of this, as I don't want them to come after me for not witholding?? Good lord.

You'd better get some legal advice if you decide to fight that claim. He might try to prove that he was actually an employee and was illegally deemed an independent contractor. Did he work from your office?

It happened to me. They tried to claim unemployement benefits but they were an independent contractor. I'd never filled out some much paperwork in my life with the MD labor department. I won in the end but it wasn't fun. That they worked from home, I didn't set their hours, etc...all went to my favor.

 

[VolAgent]

You'd better get some legal advice if you decide to fight that claim. He might try to prove that he was actually an employee and was illegally deemed an independent contractor. Did he work from your office?

Quite true. You could claim he quit, but then in doing so you may be saying he was an employee.

 

[jacobtn]

What I'm worried about is if I do nothing, it will appear that I was his employer and then they can come after me for not withholding. Is that something to worry about? I guess I'm not sure what to do. He worked on his own but used my office. Paid his own gas, etc. and was paid direct by the carriers.
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You'd better get some legal advice if you decide to fight that claim. He might try to prove that he was actually an employee and was illegally deemed an independent contractor. Did he work from your office?

It happened to me. They tried to claim unemployement benefits but they were an independent contractor. I'd never filled out some much paperwork in my life with the MD labor department. I won in the end but it wasn't fun. That they worked from home, I didn't set their hours, etc...all went to my favor.

So would you recommend doing nothing and just letting the claim get paid? I'd prefer to take the easy way out but don't what to set myself up for problems.

 

[xrac]

All that I would do is inform the state that this was a commission only 1099 insurance agent position and not subject to tax withholdings or unemployment coverage. The exemption of insurance agents is statutory and should be rejected outright once they are informed. I wouldn't worry about it. However, I would also advise them that he voluntarily quit selling as a agent with your organization.

He can't draw unempoyment because he was a 1099 and because he quit. This should be an open closed case. Anybody can file an unemployment claim but it doesn't mean they can collect.

 

[VolAgent]

What I'm worried about is if I do nothing, it will appear that I was his employer and then they can come after me for not withholding. Is that something to worry about? I guess I'm not sure what to do. He worked on his own but used my office. Paid his own gas, etc. and was paid direct by the carriers.
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So would you recommend doing nothing and just letting the claim get paid? I'd prefer to take the easy way out but don't what to set myself up for problems.

Get an attorney. He wins the unemployment claim, next claim is with the IRS and SS that you didn't withhold taxes for them. He'll use the state decision against you.

 

[Josh]

Let's back this up.

He's going to have to prove that he was an employee and it's widely known and accepted that insurance agents are 1099 independent contractors. You might be overcomplicating this. Have you contacted them and simply informed them he was an independent contractor? They might simply say "ok" and be done with it. By letting it pay out you might very well be inviting trouble.

Unemployment offices know that people lie about employment to try to game the system and let's not forget, you haven't done anything wrong here. You have more than enough grounds to prove that he was an independent contractor. Situations like this are exactly why they send those letter, "Dipshit is saying that he worked for you, please contact us if that's not true". DING, DING, DING! He didn't work for you. Contact them and then deal with the problems if they happen, but they likely wont. In the unlikely event they push the issue, you can then go ahead and start rolling out your stack of paperwork (contracting forms, etc) as to why he worked for himself.

Also, I think it's funny as hell that he's claiming for unemployment now. Sometimes things have a way of working themselves out.

 

[Crabcake Johnny]

What I'm worried about is if I do nothing, it will appear that I was his employer and then they can come after me for not withholding. Is that something to worry about? I guess I'm not sure what to do. He worked on his own but used my office. Paid his own gas, etc. and was paid direct by the carriers.
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So would you recommend doing nothing and just letting the claim get paid? I'd prefer to take the easy way out but don't what to set myself up for problems.

All I know is once the paperwork starts flying, the labor board is the one that determines if they were or were not an employee. You state your case and they state theirs.

I wish I could find the forms they sent me. It had like 10 checkboxes about the entire processs; training, hours, pay, etc...If any of the boxes were checked "yes" (which meant it indicated they were likely an employee) I had to write more about it.

I can tell you right now from my form that if you required them to come to the office each day and provided on-site training that's two strikes against you.

After I left the UGA, a few managers in TX decided to file suit on this very thing - that they were required to come into the office therefore were employees and they were suing for overtime. It was settled out of court and a rule came through UGA that managers no longer had to come to the office.

It hit it when I was there over their "mandatory Friday meetings" to which I simply said "I'm not coming and you can't make it mandatory."