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Showing results for tags 'independent contractor'.
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Good afternoon to all, A prospect, a doctor, has one employee who is currently paid W-2 wages. He wants to terminate her as a W-2 employee and then engage her as a 1099-R independent contractor. After all that is done, the next month he wants to start up an owner-only type of 401(k) plan that covers only himself and his wife, who he will bring onto the payroll. Do you see issues with this? We feel like it's a very aggressive posture to take but not necessarily an illegal one. Your advice is always appreciated. -
I recently came across an article (here) which suggested that including independent contractors in governmental 457(b) plans could cause those plans to lose their ERISA exemption. The author contends that, while independent contractors are permitted to participate in 457 plans, the ERISA exemption applies to "governmental plans," which are defined in ERISA 3(32) as plans that cover employees. (He acknowledges that plans that cover only independent contractors would be exempt in their own right because they don't cover any employees, but indicates that the governmental employer must maintain separate plans for employees and independent contractors in order for them both to be exempt from ERISA). While I follow his logic, I can't say that I've seen any other support for (or even discussion of) this position. Does anyone else agree or disagree with his position?
