Independent Contractors

The Maryland Real Estate Commission voted yesterday to tighten supervision of sales agents by their brokers.The 7-0 vote, with one absention, came after a 10-month study by a committee of commissioners and industry professionals. It followed assurances from the attorney general's office that closer supervision would not change agents' status as independent contractors.Most sales agents operate as independent contractors and not as employees.Brokers, however, are required by law to "exercise reasonable and adequate supervision" of its sales agents.

In Congress and in thousands of workplaces, the nation's business community is seeking to change long-standing rules and practices to turn many people classified as employees into independent contractors -- a move that could cause many Americans to lose health insurance and pension and unemployment insurance benefits.In a little-noticed provision in its tax bill, the House of Representatives has approved a new -- and, many experts say, more inclusive -- test to determine who is an independent contractor.

Royal Cab Association Inc., the city's second-largest taxi service, has acquired two Baltimore County cab companies, adding 35 cars to its fleet.Monarch Taxi Association Inc., a subsidiary of Royal, closed a deal for an undisclosed amount to buy Northpoint Cab Co., a family-owned business, and Emerald Cab Co. from proprietor William T. Maenner.With the acquisition, Royal will command a fleet of about 385 permitted taxis out of 1,150 allotted in the city and 280 in the county, second only to Yellow Transportation, which runs more than 500 cabs.

Mark Van Reuth, a remodeler for nearly 20 years, has been doing a little preaching in his spare time about the salvation of homes and the revival of the remodeling industry.His message, which has been well-received by homeowners at conferences and home shows, has also been recognized by The Remodelor's Council of the Homebuilders Association of Maryland, which has named him the 1995 Remodeler of the Year for his efforts."I don't think that I like getting up and giving speeches per se," Mr. Van Reuth said , "but the benefit is being able to provide education about the industry."

In a decision that could make it harder for companies to treat workers as independent contractors, a federal appeals court has ordered the Microsoft Corp. to pay employee benefits to hundreds of workers who, the court found, were regular employees and not independent contractors, as Microsoft insisted.The U.S. Court of Appeals for the 9th Circuit in San Francisco looked to rulings of the Internal Revenue Service and payroll records to conclude that the workers were not contractors, but regular employees -- and thus entitled to participate in Microsoft's 401(k)

If you think working as an independent contractor means you're free and self-reliant, don't kid yourself. Typically, this work arrangement makes you more of a slave than you'd be in a staff job. As a rule, you get no benefits, no paid time off for family or medical emergencies, and no protection against discrimination. Many of the workers accepting these gigs lately would be better off as full-time employees.Companies like independent contractors -- sometimes called consultants, free-lancers, contingency workers, or temps-- because they cost less than employees.

"You know, this 'chaos' idea makes sense," a seminar participant began, politely enough, upon collaring me at a break, "but I'm not sure the average person is up to it. We need some stability.""Crazy times call for crazy organizations," I'm fond of saying. The personal implications are daunting, as job security becomes a distant memory and even newly acquired skills turn out to have a half-life of just a few years.But the fact is, I agree with the seminar participant. Not only that, I freely admit that I hate change.

Also yesterday, the headline on a story about Baltimore Gas and Electric Co. incorrectly stated the percentage increase in the company's revenue. Net income increased 24.8 percent during the company's first quarter. Revenue increased 9.4 percent for the period.+ The Sun regrets the errors.Pushed to its limits by the punishing winter storms, the Baltimore Gas and Electric Co. got its payoff with a 24.8 percent increase in first-quarter net income, to $82.1 million, the company announced yesterday.

Taxi drivers at Baltimore-Washington International Airport, angry that their fees have gone up while ridership has declined, want help from a union to protest working conditions they say keep them from earning a decent living.The cabbies could vote later this month to associate with the Masters, Mates and Pilots Union, the marine division of the International Longshoremen's Association, which represents workers at the Port of Baltimore.The 116 cabbies at the airport all are independent contractors.

Independent contractors (free-lance journalists, software programmers, gardeners) wake up knowing that before sunset they must (1) re-prove themselves with clients and (2) learn a new wrinkle to up the odds of survival. But the self-employed are not alone. I contend everyone -- bellhop, computer scientist, boss -- had best achieve the mind-set of an independent contractor."People do realize that job security is gone, but many don't realize what it's been replaced by," says University of California at Berkeley Professor Homa Bahrami.

Senate supports strip-search bill The Senate gave preliminary approval Thursday to a measure that would prohibit police and correctional officers at jails from conducting strip searches or body-cavity checks of people newly arrested for misdemeanors or traffic offenses. The bill would allow that such searches can be conducted only if the officer has a specified reasonable suspicion and receives authorization from the highest-ranking officer on duty. Julie Bykowicz Workplace fraud bill gains The Maryland Senate approved a bill Thursday that would penalize companies that improperly classify employees as independent contractors but also would limit workers' ability to sue for damages.

Foreign competition and state regulation haven't completely wiped out Maryland's once-storied needle-trade industry, but the Department of Labor, Licensing and Regulation is working on it. It wants to raise taxes on Alice's Home & Cottage, a small Hagerstown company that sells period clothing to Monticello and Colonial Williamsburg and buys work from dozens of nearby women who lost jobs when the sewing mills closed. The state says Alice's must treat the women as employees and pay tens of thousands of dollars to the unemployment insurance pool on their behalf - even though by any common sense measure they are independent contractors.

Small business owners often try to save money by using independent contractors instead of hiring full-time employees. Using independent contractors means the business doesn't withhold taxes, pay Social Security or Medicare or meet numerous other employer responsibilities. Many such arrangements, however, wilt under Internal Revenue Service scrutiny. The strategy can backfire if someone later claims he should have been treated, and paid, as an employee. Deciding who can legitimately work as an independent contractor and who must be given employee status has become a difficult matter for small business owners.

Freelancer, sole operator, independent contractor and free agent are all terms for a small business operator with a key trait in common. All are constantly looking for new areas to fill their time and pay their bills. For these business owners, the Internet has become a market place in finding work. To be successful as a free agent operator, you need to project your finding skills and improve your marketing, as does any small business. The keys to success at this are consistency and dedication.

Q: I work for a small, family-owned business and receive a base salary, plus commission. The salary is taxed, and I receive a W-2 at the end of the year. But my employer doesn't deduct taxes from my commissions, and I receive a 1099 at the end of the year. To make matters more confusing, some sales consultants who do the same job as I do are treated as independent contractors and have no taxes taken out of their salary or commissions. They receive just a 1099 income statement at the end of the year.

HUMORISTS make a career of mocking incompetent bosses. But sometimes mismanagement isn't funny, it's illegal. And it hurts working people. In fiscal year 2003, the U.S. Department of Labor collected $213 million in back wages on behalf of 342,358 employees. And these are only the violations that the government learned about. The Fair Labor Standards Act governs the payment of wages. Any employee who works for a company - including a not-for-profit company - involved in interstate commerce is protected by it. Buying paper clips across state lines can constitute interstate commerce, according to Alan Koral, a partner at Price, Vedder, Kaufman & Kammholz in New York.

ALREADY unpopular with consumers and under legal scrutiny by federal investigators, so-called "transaction fees" by real estate brokers are attracting an even tougher set of critics: sales agents themselves. Transaction fees - also known as "administration" or "regulatory compliance" fees - have been introduced by many brokerages during the past 18 months. Often ranging from $250 to $595, they are surcharges to homebuyers and sellers on top of the regular 6 percent or 7 percent sales commissions.

The Maryland Real Estate Commission voted yesterday to tighten supervision of sales agents by their brokers.The 7-0 vote, with one absention, came after a 10-month study by a committee of commissioners and industry professionals. It followed assurances from the attorney general's office that closer supervision would not change agents' status as independent contractors.Most sales agents operate as independent contractors and not as employees.Brokers, however, are required by law to "exercise reasonable and adequate supervision" of its sales agents.

In Congress and in thousands of workplaces, the nation's business community is seeking to change long-standing rules and practices to turn many people classified as employees into independent contractors -- a move that could cause many Americans to lose health insurance and pension and unemployment insurance benefits.In a little-noticed provision in its tax bill, the House of Representatives has approved a new -- and, many experts say, more inclusive -- test to determine who is an independent contractor.

In a decision that could make it harder for companies to treat workers as independent contractors, a federal appeals court has ordered the Microsoft Corp. to pay employee benefits to hundreds of workers who, the court found, were regular employees and not independent contractors, as Microsoft insisted.The U.S. Court of Appeals for the 9th Circuit in San Francisco looked to rulings of the Internal Revenue Service and payroll records to conclude that the workers were not contractors, but regular employees -- and thus entitled to participate in Microsoft's 401(k)