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1099 or W-2 for Town Secretary

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  • 1099 or W-2 for Town Secretary

    A citizen has reached out to me recently concerning the employee status of our secretary. They sent the following email and image below:
    thumbnail_image001.pdf
    “See below, At last nights meeting the Mayor stated she got her 1099 completed and the inference I took is that was in regards to our current and past Secretaries. I believe this is an incorrect classification. The Secretary should be considered an employee whether it is full or part time. The position does not meet the definition provided by the IRS.”

    This has been a concern of mine as well. Going off of my business experience, our secretary position shows signs of fitting under the W-2 worker category as quoted by uschamber.com (Article Linked):

    “In most cases, a worker should be classified as a W-2 employee if:
    • You control the details of how the work is performed.
    • You provide office space, equipment and supplies for the worker to complete tasks.
    • You provide employee benefits, such as insurance, retirement plans or vacation time.”

    To my understanding 2/3 of these fit our secretary position. Let’s contrasts these with the signs of a 1099 worker:

    “Workers should be classified as 1099 contractors if:
    • They control when and how they perform their work.
    • They use their own equipment and supplies to complete tasks.
    • They provide services to several different clients who pay them directly for their work.”

    To my understanding 0/3 of these fit our secretary position.

    Admittedly, my knowledge is limited to business, so perhaps there are special rules for a municipality. If this is the case, I would be very grateful to be linked to that information.
    To me, using the information I have at this moment, it’s fairly clear the secretaries should be receiving a standard W-2. This should be of interest to the rest of the council not only for moral reasons, which hopeful are the more important part, but also for legal reasons. We can be sued and fined over misclassifications, so I’d suggest giving our attention to this topic.


  • #2
    Simeon
    I appreciate the post. I too was approached by a citizen and forwarded it to Tara and Mike. Tara reached out to Mr. Berman via email for his thoughts and legal advice. I will let her share that information.
    I have a hard time interpreting law but the points you have made in this thread seem reasonable.

    Comment


    • #3
      I agree with the citizen on this one. I was actually involved in a suit against an employer where they were classifying employees as contractors and the employees prevailed. I would be interested to hear Mr. Berman's feedback.

      Comment


      • #4
        This topic should be handled in an executive session. Nonetheless, it is here. Our previous attorney firm approved the city secretary's position as a 1099 over a year ago.
        Many small towns have it as such. She makes her own hours, has autonomy, uses her own equipment as she often works from home, has flexibility and makes her own invoices.
        And we have no employee benefits to offer.
        Employment law has become more strict in recent years, so we will discuss with our current attorney probably in an executive session soon.

        Comment


        • #5
          I see no need to have an executive session. You have already reached out to our legal counsel. Post his emails here for council to review and we could save that money.

          Comment


          • #6
            I agree with Mr. Terry. By default, I believe town business should be as open and public as possible. I believe the citizens and secretaries are owed an explanation for our actions, especially concerning something as important as employee classification.

            We hold a public office to serve the public, so why shouldn’t this information be public as well? If we made a mistake, let it be known. If the law firm made a mistake, let it be known. If no mistakes were made, let it be known. Why not make this public? Surely, we have nothing to hide.

            I’ll also mention that to date I haven’t received our attorney’s email concerning this. It wouldn’t break OMA to have the secretary send everyone that. I think it’s best practice to send out this kind of information to the council once it’s received, how are we suppose to have an informed discussion without it?

            Comment


            • #7
              I don't see where the classification of a person as a contractor or employee should be an executive session item either. Not sure we should be posting emails from our lawyer here, but the discussion certainly is certainly something the citizens should be able to see.

              Comment

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