This came into the blog as a comment on the EOR thread, but I thought that the content was strong enough to warrant placing this important information on the front page.
Hey Guys,
Wanted to pass along this email I just sent out to a lot of my freelance friends. Some Very useful information for those of you looking to take action against MBO/YUCOR. Please read through carefully!!
Hey Guys,
So I’m sure everyone’s been dealing with or at least heard about the whole MBO/Yucor fiasco. While the best ways around their policies at the moment are either to go through the process of incorporating and all that it entails, jack your rate up by an amount that somewhat compensates your loss, or just avoid dealing with those companies all together, my buddy has been digging up some more info on the companies that I wanted to pass along. He’s been speaking with his accountant and attorney about the procedures MBO/Yucor use and it’s pretty interesting stuff for those of you looking to take some action. I’m attaching all the emails he sent me. I’d recommend reading through them! Please forward to anyone that could use the info!
I just got back, from my accountants, figuring out my taxes and then i showed him the yurcor stuff thats been happening – how we filled out a w-4, which makes us an employee of yurcor, but then they took out employer taxes still and our that money didnt show up in our gross pay pay stubs. Anyway, he said what they’re doing is illegal and can’t believe they’re getting away with it. Then he laughed when i told him they were telling us to scan our writeoffs for their approval!
He said he actually has a client, in New Jersey, currently going through the same situation, not with yurcor in particular, but still how they were taking away funds as an employer when they shouldn’t have and the New Jersey Dept of Labor got them their money back. So he said contact the NY City (or state?) Dept of Labor telling them of the situation. It gets a bit sticky since Yurcor is supposedly based in Florida (according to their tax forms we got) and the DK i worked for is based in chicago so the NY Dept of Labor may think it doesn’t have anything to do with them since those are out-of-state companies. HOWEVER, yurcor/dk paid NY state wages and withheld NY state taxes which makes it a NY Dept of Labor problem. By taking away employer taxes (which are rightfully ours), they are taking away money from NY state since that should ALL be our money that NY state taxes and we receive. Our loss of income is actually the states loss of income – make sense? Look at your pay stub and you’ll see the only income listed is just the employee section and nothing is reported of the employer income – ILLEGAL. The employer tax they are withholding is actually helping to pay DK’s taxes. It gets even funnier because Yurcor uses the pay service ADP to cut us our checks. WTF? ADP does the SAME kind of service Yurcor does just NOT shady. How so? We called them up and i was doing some research on the ADP website. They provide the same sort of service as yurcor, but when we explained to them what Yurcor was doing they were completely baffled since we are classified as yurcor employees. Put 2 and 2 together and you see that ADP has been handling the ‘employee’ part of the pay that yurcor has been reporting to them, which sounds legit. This employer part is the scam that yurcor is helping front for DK and these other studios to help pay for their taxes (which other freelancers have started to figure out correctly).
Anyway, 2 accountants at the firm we were at said to contact the NY City Dept of Labor and see if they have a ‘wage and hours’ division. Thats what New jersey has that helped get their jersey clients their money back. If for some reason this doesnt work, he said DEFINITELY contact the IRS. Also, besides the IRS contact the National Labor Relations Board (http://www.nlrb.gov/) to get on Yurcor’s ass (and mbo for that matter). Either way, they all agreed what Yurcor is doing IS completely illegal and all that employer money being held is rightfully ours. Their clients have won the case in Jersey so we should win ours. If we can spread the word around, a bigger force in numbers always helps. If this sounds confusing feel free to contact me and i can better explain what went down at my accountants office today. I feel a lot better about this all, but i’ll feel much better once i get my money back!
spread the word! i’m contacting the dept of labor this Monday. I’ve already saved all of Yurcor’s payroll information they provide on the sites that show all the employer taxes they withheld. Great to have since our paystubs don’t mention any of this.
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Here’s links to all the places they recommended contacting. Might as well contact them all so they all hit yurcor and mbo at once!
http://www.labor.ny.gov/agencyinfo/aicontactus.shtm
http://www.tax.state.ny.us/
http://www.nlrb.gov/about_us/locating_our_offices/index.aspx
http://www.irs.gov/localcontacts/article/0,,id=98318,00.html
seriously, lets get this ball rolling.
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So the accountant said the first people to contact is NY Dept of Labor to see if they will do anything about this since it IS their problem. The lady at first tried to tell me we aren’t covered under NY State law since we got paid daily wages and that there was nothing I could do except hire an attorney and take them to court. Before she hung up on me I told quickly told her i signed a w4 form with the company making me an employee and i got an end of year w2 tax form showing employee taxes they withheld, but it didn’t show the employer taxes they withheld, which they shouldn’t have since i am an employee and since it was NY taxes being withheld this is a Dept of Labor problem. So she then directed me to this PDF complaint form and where to send it to. She said when you fill it out and mail to them, you must have ALL your proof. The IRS tax forms (i guess thats the w2), but i’m also including scans of my pay stubs and their online payroll tax withholding breakdowns. I suggest you do the same and pass the word around. The next step would be to contact the NY State Dept of Taxation and Finance because their site will really pursue if “your situation represents a systemic flaw that may adversely impact other taxpayers” & “You believe that the unique facts and circumstances of your case warrant assistance by the Taxpayer Rights Advocate” which it does.
DIRECT PDF FORM:
http://www.labor.state.ny.us/formsdocs/wp/LS223.pdf#page=1
information:
http://www.labor.ny.gov/search/search.asp?query=ls223&submit=GO
mail to:
New York Dept of Labor
Bldg 12, RM 185C
Albany, NY 12240