This Tommie Jones scenario of him being a “Consultant” gets better and better.
Although Jones does not have a contract per see, at least entitled a contract, there is a “Memorandum of Agreement.
The Purpose of this agreement is stated as such: “The Town of White Springs is in need of someone to serve as Town Manager on an interim basis until the Town determines the skills, experience and schedule it desires for a full time Town Manager and advertises and identifies an appropriate candidate to serve as the full time Town Manager. Tommie Jones has knowledge and work experience which makes him a logical fit for purpose of Interim Town Manager. Accordingly, this MOA serves to outline the terms and conditions governing Mr. Jones’s service as Interim Town Manager for the Town of White Springs.
And then the Roles and Responsibilities stipulate Jones agrees to serve as Interim Town Manager for a period of six months, beginning October 17, 2019 up trough and including April 17, 2019; that he work 20 hours per week, and accept $25.00 per hour for all hours worked.
The Town of White Springs agrees to pay Mr. Jones $25 per hour for all hours worked plus delegate to and authorize Mr. Jones to perform all duties and responsibilities afforded by the Charter to the employee ordinarily serving as Town Manager.
From this agreement, it is obviously The Council wishes to be in control and are hoping there is a strong mayor form of government in place for a four year term at election. It also infers in the Town’s agreement that he is to perform all duties…….to the employee ordinarily serving as Town Manager, basically allowing to have Mr. Jones believe he is a consultant in spite of the fact that the Law differs and we have shown that throughout.
Since a Consultant must be paid separately from being an “Employee under contract” Tommie now after the first check was drafted now utilizes “Countyline Design Business Services Inc. where all White Springs Payments are issued. So as I mentioned once, he is using his holding Company as his business, which may be one part of the consultant/independent contractor scenario, but not all. I guarantee you that the IRS will have a field day with this. He now is not receiving deductions for Social Security and Medicare (FICA) to show he is not an employee but will he pay the 15.3% of his income required under FICA?
FICA tax is typically 7.65% of earnings up to $127,200 (2017 figure). Employees pay 6.2% of their earnings for Social Security retirement benefits and their employer pays 6.2% for a total of 12.4% of a worker’s income. An additional 1.45% tax is also collected to fund Medicare benefits and this, too, is matched by employers.
Self-employed persons pay both halves of both taxes for a total of 15.3% of their net business earnings. These taxes are reported on Schedule SE with their income tax returns. Self-employed persons can deduct the employer-equivalent portion of self-employment tax in figuring their adjusted gross income (AGI).
Now the IRS has a new ruling which is a gray area. If he is a consultant for computer services, he would need a check issued to Countyline Design Business Services, Inc. from which no taxes would be taken out and Jones would be responsible. However, because of the Florida Right of Control Law relating to consultants and independent contractors (one in the same), it could cost White Springs some Money for not reporting taxes on the “Town Manager” position because both the Town and Mr. Jones would have to pay 7.65% for FICA for the hours Jones worked as a Town Manager. Don’t you just love it.
This type of confusion can be costly to employers like the Town of White Springs, especially if they fail to withhold and pay Social Security, Medicare and unemployment taxes and fail to withhold income taxes. Federal and State wage and hour enforcement may also have been compromised along with effective and meaningful employee relations.
Now let’s just look at Florida’s Right of Control Laws which are listed below:
- The extent of the right of control by the employer over the details of the work; – COMPLETE CONTROL WHILE OPERATING AS AN INTERIM TOWN MANAGER AND HAVING AN OFFICE IN WHITE SPRINGS TOWN HALL.
- Whether the person employed is engaged in a distinct occupation or business; JONES IS NOT ENGAGED IN A DISTINCT BUSINESS BUT USES COUNTYLINE DESIGN BUSINESS SERVICES, INC. HOWEVER, THERE IS NO SERVICE AGREEMENT AS TO WHAT HE IS A PROFESSIONAL OF AND IF IT IS COMPUTERS, A SEPARATE SERVICE AGREEMENT SHOULD BE DEVISED AND SUBSEQUENTLY A SPLIT IN WRITING IN THE WEEKLY CHECKS ISSUED (I.E. A CHECK AS AN INTERIM TOWN MANAGER/EMPLOYEE AND A CHECK FOR HIS DESIGN WORK WHICH HE HAS TO BILL AND WILL NOT FALL UNDER THE TOWN’S $25.00. otherwise the IRS can get pretty upset.
- The kind of occupation involved, and whether the work is done under the direction of the employer or by a specialist without supervision; A TOWN MANAGER POSITION WHETHER INTERIM OR PERMANENT IS NOT CONSIDERED A PROFESSIONAL CONTRACTOR POSITION BUT RATHER AN EMPLOYEE POSITION AND CURRENTLY SINCE MR. JONES IS INEXPERIENCED HE IS UNDER DIRECT SUPERVISION OF THE MAYOR AND OTHER COUNCIL MEMBERS. AS TO HIS DESIGN WORK IF HE CAN BE CONSIDERED A PROFESSIONAL HE NEEDS TO BE LICENSED AND PAID SEPARATELY FOR THAT WORK.
- The skill required in the particular occupation; ALTHOUGH MR. JONES HAS STUDIED FOR HIS MPA BUT HAS NOT COMPLETED HIS DEGREE, A TOWN MANAGER OCCUPATION IS CONSIDERED TO BE ONE AS AN EMPLOYEE UNDER CONTRACT. AGAIN A SERVICE AGREEMENT WILL BE REQUIRED FOR HIS DESIGN WORK AND AS SUCH, HE WILL BILL THE TOWN FOR THE SERVICES AND IT DOES NOT HAVE TO BE $25.00.
- Whether the employer supplies the instrumentalities, tools, and the place of work; THE EMPLOYER SUPPLIES ALL THE INSTRUMENTALITIES, TOOLS AND PLACE OF WORK
- The length of time the person is employed, JONES IS HIRED AS THE INTERIM MANAGER FOR A PERIOD OF SIX MONTHS BY CONTRACT AND ORAL STATEMENTS except THE TOWN IS TRYING TO SAY HE IS A CONSULTANT and
- Whether the work is a part of the regular business of the employer. THE WORK IS A REGULAR PART OF THE BUSINESS OF THE TOWN OF WHITE SPRINGS AND INCLUDES SUPERVISION OVER ALL EMPLOYEES OF THE TOWN AS WELL AS HANDLING THE DAY TO DAY REQUIREMENTS OF THE TOWN WHICH THE COUNCIL ASSIGNS TO HIM.
Frankly this is a charade since the Town does not wish to do an employment background on Mr. Jones, nor a drug test nor have him fill an application. Background checks were done on all previous candidates and employees including Managers so this is not racist. But it is reverse discrimination if Mr. Jones is allowed to NOT complete an application, get a background check and a drug test.
This is why White Springs has such a bad reputation and it never seems to stop. Not only can this cause White Springs with the IRS but the contract or Agreement as written indicates Mr. Jones is an “at will” Interim Town Manager meaning he is an “at will” employee and can be fired at any time for no reason whatsoever and Jones signed this agreement.
And since I am certain Countyline Design Business Services Inc. does not have its own General Liability Insurance including Personal and Advertising Injury and Contractual Liability which is required for that Service Agreement he doesn’t have, the Town will be responsible for any negligence of Mr. Jones. He also does not have any “Professional Liability” Compensation so if he does something wrong that Costs the Town Money, the Town has no recourse but to pay and as far as Workers Comp, since sole proprietors are exempt and he cannot be a sole proprietor because he is incorporated under Countyline Design with no employees so the Town will have to pay for any injury or death because Mr. Jones does not carry Workers Compensation, I am certain.
So there you have it. Who is corrupt; why are they doing what they are doing? Are they setting Tommie up? Are they setting themselves up? Are they ignorant or just skirting the law hoping they will not get caught.
Karin for the blog