Anyone here self-employed? I need advice

[Phatferd]

I have been working with this specific company for 5 months as a 1099 employee. This makes me self-employed, which isn't what I really wanted, but it got my foot into the door (I am 24) for an actual career.

Their reasons for making me self-employed were that the state of California makes it hard for them to pay me due to all of their employment laws. My official title is "Technical Sales Rep" and my job is to be the sales representative in Orange and LA Counties for this particular company. I am the only person in California being paid to sell this product. It is a national company, but they only had a Western Regional Sales manager who is based in Arizona and he covers 10 states. Our product has been in stores here for 20 years, so it's not a new product.

I was hired with a salary of $35,000 and a $750 a month expense allowance (for car, health insurance, food, and any other expense). I knew when I took this job that I was getting shafted, but really wanted to take it to build up the experience and use it for future employment. I have been doing this for the past 5 months and not said anything. Today my boss calls me and tells me his boss wants me to turn in call reports on a weekly basis and if I don't I will not get paid.

My first question is can they legally do this if I am self-employed? I understand they can fire me whenever for whatever, but if I am self-employed I have the authority and power to do whatever I feel is fit to perform the job I was asked to do. If I am told when, where, and how to do something, I am an employee of their company. According to the IRS this is the case.

Second, I am not able to cover my entire market on my allowance. Meaning, if I were to drive all over my territory I would spend more in expenses than I would get back. I'll be honest and tell you that I don't cover my entire territory that I am supposed to because of this. I have serviced the entire territory, but not on a consistent basis. For example, I will focus on one area over a month, then switch another the next month, and come back to the first territory the third month. If I were to do my entire territory in a month, I would roughly spend $1100 in expenses and I'm not willing to eat $350 of my own money each month. Especially if I have to pay a 15% self employment tax at the end of every year on my taxes.

Does anyone have experience in this area and know what the true definition of self-employed means?

[BStecke]

I can't really answer much of that, but I have a question for you . . . I own a business and need to get my own health insurance . . . who do you have? Any good? I'm in Florida so it may not even apply, but I'm looking for all the input I can find.

[Phatferd]

I have Blue Shield. The plan I have is OK. It really is what I can afford. They have other plans, so it's hard for me to say without knowing how much you can afford each month.

I pay for mine to basically get medication cheap when I get sick. If I have to go and get a lot of tests done, I pay 40% until I reach $5,000, which is my deductible.

[Sylin]

You are essentially a contractor, so they pretty much have the right to tell you what to do and how to do it if you want to keep the contracted job with them, with a few exceptions. However, if the company wants you to submit reports, then that's a term of the job and thus you must.

I've been an entrepreneur most of my life, and have started and sold several businesses (and reluctantly shut down a few, too ). Presently I own a consulting firm in Nashville and we have both 1099 contractors and W-2 employees. But I am not an attorney, nor do I know the employment laws of the state of California. So if you have concerns, I'd recommend contacting your state's employee resource department - http://www.edd.ca.gov. If you openly and honestly explain your predicament, they can tell you what is and what is not within the legal limits in your state.