In California, can someone laid off from a W-2 position be hired back to be a 1099 contractor? If so, is there a waiting period?

Thanks so much!!

I have not heard of a waiting period, but it is seems rather suspicious that the employer is rehiring the worker as an independent consultant. I think the employer is attempting to circumvent the payroll taxes and I suspect the IRS would feel the same, especially if it happens in the same tax year!

In case you happen to be the employee, I would suggest that you not accept a 1099-Misc from the same employer.

In case you happen to be the employer, I would suggest that your should certainly avoid rehiring the employee as an independent consultant, as I strongly feel you would be hearing from the IRS on this and may face potential penalties and other fines etc.

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Thank you for your feed back!! The thing is, I was the employee, but my position used to be in a now-defunct division. There are certain corporate projects that they can use me on, but the work does not collectively add up to a full time position. So, I asked to be 1099 so I can have flexibility in my hours and preferred duties. Is that allowed in CA?

With respect to your question, "Is that allowed in CA?", I really don't know the answer, but if you have a really good reason for your circumstances than I think that you have to take up the assignment as a 1099-Misc contractor.

But, I suggest that you carefully review the IRS requirements for being a qualified consultant or as an independent contractor!

Please click the following link below to familiarize yourself with the IRS requirements of passing the litmus test of being an independent contractor.

Will your employee's status as an outside contractor pass the IRS litmus test?

Good Luck on your assignment!

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