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Statutory status - Confused

Posted: Sep 17, 2013

Is anyone a statutory employee with Nuance? I was under the impression that I was an employee. I was sure we were told there would be no SE status available. However, I recently noticed on my pay stub that it says statutory. Does this benefit me or is it going to bite me? I have not paid self-employment tax for quite some time. I was told I was an employee, so I assumed all employment taxes were being paid.

Statutory is different from being an IC - sm

[ In Reply To ..]
or "independent contractor." Statutory means at-will employment, which means they can fire/hire you at will. Someone correct me if I'm wrong on that. As far as being an employee, you should be. They should be taking out the appropriate taxes and that should be reflected in your pay stub, or you should be able to see the taxes online. Nuance probably has a few ICs, but I doubt there are too many.

Statutory status - Confused

[ In Reply To ..]
Yes, I know the difference between IC and SE. I have been both. When our company was bought by Nuance, we were told quite specifically that there would be no more SE and no IC, only employee status. That is why I was so surprised to see statutory on my pay stub. SE tends to have more freedom like an IC in some regards, which is definitely not the case at Nuance where they micromanage every aspect.

How the IRS defines statutory - Realist

[ In Reply To ..]
Most employers are aware of the two most common types of relationships with an employer: an employee relationship and an independent contractor relationship. In reality, the IRS defines four different types of relationships: the employee, the statutory employee, the statutory non-employee and the independent contractor. To better understand one of the least commonly known types, consider the statutory employee as somewhere between or a mix of the independent contractor and employee type of relationship.

A statutory employee is an independent contractor; however, the worker is to be treated as an employee by statute (by law) for certain employment tax withholdings. In a true independent contractor situation, an employer is not permitted to withhold any taxes as this would jeopardize the independent contractor relationship and create an employee relationship. However, in certain professions designated by the IRS, the person still operates as an independent contractor under common law rules, but certain taxes must be withheldâ��thereby creating a middle-ground type of relationship called a statutory employee.

Under the IRS guidelines for meeting the requirements of statutory employee, the employer is instructed to withhold FICA taxes on their income. Because statutory employees pay FICA tax through their employer, they are not liable for self-employment tax; however, they still must report their wages, income and allowable expenses.

The IRS provides guidelines for statutory employees including designated categories and three required conditions. To determine if you have a statutory employee relationship, you can find detailed information here.

Statutory status - Confused

[ In Reply To ..]
Thank you for this. I had looked this up on the IRS site myself and read this. If, as this says, a statutory employee is an IC, just treated differently for tax purposes, it makes me question how I can be classified as an SE, and yet be required to punch a time clock, have lines per hour requirements, FIESA, etc.

SE versus IC - ari

[ In Reply To ..]
Are they taking taxes out of your check? If they are then you are not an independent contractor. I wanted to be IC because you get a lot more tax write offs. I only worked part-time so my self employment tax wasn't too bad. I personally would rather be IC. If you get the low income credit you are better off being a statutory employee - you get more back the more you make on your W2.

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