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Broker won't pay invoice

My client terminated my contract because I refused to take rate cut and I wanted to work from home for a little while. I was corp-to-corp through a broker. The broker is now saying they won’t pay my final invoice because of some discrepancy with time. The client approved my final timesheet (for one week) on a Friday for that week, before they terminated me on Monday. I wasn’t told that it would happen.

I told the broker if they don’t pay the invoice it will be breach of contract and I will sue them. Do I have to sue them only in the state they are headquartered in or can I sue them in my home state where I worked. I suspect either the broker is trying to screw me over or the client rejected the timesheet out of spite after approving it in their online system. The amount is less than 4K.
Annoyed
Friday, June 20, 2008
 
 
take them to small claims court in your local court. Its like $100 or something. then like $20 to subpeona someone.

did the client sign the invoice?
what is the "discrepancy with time? what do they want to change? Are they saying you don't get paid at all?

if your contract says "you get paid only if we get paid". you are screwed.
Contractor
Friday, June 20, 2008
 
 
If they don't pay, tell us who both parties are.
Doug
Friday, June 20, 2008
 
 
Threaten to file a complaint with the state where they are located.  I once had a similar issue like this.

In your threat, let them know you intend to file a formal complaint with the state of (enter your state here) for failure to pay approved wages within X number of days.  (hopefully you have documents to show the approval).

When you're terminated, There is a state law in every state (not sure of what it's called of hand) that requires that you receive your final check within so many days of employment termination.  I know this both as someone who invoked it a long time back and as an employer/company owner.

You can also, depending on the relationship, let them know that you're sure they don't want the state breathing down their neck. 

The last thing any company wants is the local government investigating them!
~Eric
Friday, June 20, 2008
 
 
1) Talk to a lawyer

2) It all depends on the area of jurisdiction as defined in your contract with them. Since you don't know, and since they probably drew it up, it will probably be in their own state (which is cheaper for them to handle).
Code Slave Send private email
Friday, June 20, 2008
 
 
In Michigan, at least, you can do this on-line by the way.  I think most other states have a web site (.gov) that can fill you in on the finer details.

Also, because you say corp-to-corp, many states have a small business administration type office that is there to help small business owners.  They are usually staffed by volunteers.  In Michigan we have one.  You can usually call them and ask for the correct name/language for the form you need to file and use that form name in your threat back to the broker.
~Eric
Friday, June 20, 2008
 
 
"depends on the area of jurisdiction as defined in your contract "

That's not a true statement.  There is no contract language that can be invoked that precludes invoking the state law.  All businesses, when they are set up, agree to abide by local and federal laws governing.
~Eric
Friday, June 20, 2008
 
 
I recall the contract saying something about under the jurisdiciton of the state they are headquartered in. Does it mean I can sue them only in that state not the sate where I worked and lived? I didn't print out the approved timesheets. I never expected this to happen. The broker refuses to tell me in writing what the discrepancy in approved time is.
Annoyed
Friday, June 20, 2008
 
 
My contract doesn't say "you get paid only if we get paid". I removed that at the time it was signed. The terms are 15 days after invoice.
Annoyed
Friday, June 20, 2008
 
 
>>> I recall the contract saying something about under the jurisdiciton of the state they are headquartered in. <<<

Keep copies of _everything_!

Friday, June 20, 2008
 
 
Always keep a paper trail - always.

At this point you'll either have to talk to a lawyer or file against them in small claims court.
The Original Henry
Friday, June 20, 2008
 
 
Small clamis court where? In my state or where they have headquarters? They have offices in many states except where I live.
Annoyed
Friday, June 20, 2008
 
 
Unfortunately, my timesheets are files online and approved online. I didn't get a chance to print out the confirmation from teamlead saying he approved my timesheet. I will just have to subpoena him to testify.
Annoyed
Friday, June 20, 2008
 
 
you don't have a copy of your timesheet?
you don't have a copy of your contract ??????

you need to get a copy of your contract.

you should call and annoy the client to find out what is wrong. if they fired you the bridge is burned. Why would you care if the client gets mad at the broker?

I would actually drive to the office.
Contractor
Friday, June 20, 2008
 
 
Without your timesheet, you are screwed.  Even if you sue, you don't have proof that you worked it and they approved, so it's a hard sell.  Since it's corp-to-corp, they can simply claim they didn't get the value they were expecting.

One possibility is to threaten to complain to the IRS claiming they were treating you like an employee rather than a consultant.  That might freak them out enough to pay you off :)

Friday, June 20, 2008
 
 
Broker says client is now claiming I didn't work all those hours that were approved in the timesheets. Client wants to pay less. Obviously the bridges with the client were nuked by them and there isn't anyone in management I can speak to. One of client's biggest complaints is that I refused to come one site every day, despite my being IC and telling them they can't make those demands per IRS rules. The other complaint is that I am insubordinate for refusing to come on site everyday. I had even tolerated them refusing to pay me overtime numbering in 100s of hours. They owe me tens of thousands in overtime pay which is to be paid per my contract with broker. I am going to talk to an employment attorney and see if there is a way to go after back pay for overtime.
Annoyed
Friday, June 20, 2008
 
 
>> The other complaint is that I am insubordinate for refusing to come on site everyday. I had even tolerated them refusing to pay me overtime numbering in 100s of hours. They owe me tens of thousands in overtime pay which is to be paid per my contract with broker.

There is folklore around about contractors pressuring companies that stiffed them by threatening to inform the IRS that their relationship with the client was really full time employment.

Yeah, definitely talk to a lawyer to understand your options. Your client is typical, a whining f*cking baby who wants things both ways - a full time seat warmer (employee equivalent) whom they can fire at the drop of a hat and deny payment to (contractor.)
Bored Bystander Send private email
Friday, June 20, 2008
 
 
@~Eric
"All businesses, when they are set up, agree to abide by local and federal laws governing."

That is true, but normally your contract (especially in a cross-borders situation - national, state, or provincial) provincial will have some language in it defining where disputes will be settled. Most of what is in contract law is "it depends".

Because it was corp-to-corp, employment law may not come into effect here, as a it's a breach of contract between two corporations. e.g., Annoyed's corp is obligated to follow local employment laws and even "pay" Annoyed; however, the client is not the employer here, so they don't matter to them. That is unless you can find a way to convince the Gov't that he was an employee.

But then his tax benefit for doing corp-to-corp would go away). That's one of the risks in doing corp-to-corp; otherwise EVERYONE from the CEO right down to the mail-boy would be doing the same thing to avoid taxes, etc.

IANAL, but I do know enough to say, consult a lawyer.
Code Slave Send private email
Friday, June 20, 2008
 
 
@Code Slave:
I was disputing what is called venue.  Venue is where you agree to settle your legal differences.

OP,
You don't need to sue but I do recommend you get a lawyer involved.  Go to your local state employment agency and find the name of the form I referenced in my previous post.  (I'll try looking it up for you and post back here in a day or so).  Once you threaten them with a state level complaint, they should pay up.  There are a couple reasons for this:

1.  Assuming what they owe you is less than the cost of hiring a lawyer to fight your claim or state investigations into their practices.

2.  If this company is an S-Corp or C-Corp, by law they must keep meeting minutes.  A good lawyer will ask to see meeting minutes.  If no meeting minutes were kept, you can build a really good case for yourself here.  LLCs are not required to keep meeting minutes.

3.  Companies found guilty of not paying wages within so many days of your termination then have to not only pay your wages but they have to pay them with a substantial penalty plus fines!

You have several things in your favor here.  I went through this very same issue when I left a job.  I was a Director level employee in IT.  The company I worked for had a Time Bank plan where one could bank unused vacation time (I was a work-a-holic).  So when I left, I demanded the cash out my unused time at my current salary which was the company policy.  They gave me hard time paying up but I won in the end.  Then about 2 years later I was on a contract GIG where I was a 1099 type employee and similar situation came up.  I live in Michigan but was in Georgia on a contract.  I came back to Michigan after the job was done, the company was having financial problems, and was taking too long to send my final check.  They never, in this case, contested what they owed me but they were taking too long to pay up.  In this case, I used Michigan law to pressure them to pay me my final check.

So if you are corp-to-corp and you are working across state lines, where were your checks mailed too?  This is where you should file your complaint.  The company that is paying you must pay state unemployment tax for each state they operate in.  So if your check was mailed to you or they recognized you as their 1099 employee doing work from your state (assuming you worked in one state while company in another state) then you should file in your state.
~Eric
Friday, June 20, 2008
 
 
Exact same thing happened to me. I called the end-client and told them I was going to petition the IRS to reclassify me as their employee so that I could then sue them for wages.

The end-client was *incredibly* pissed at both me and the broker, called the broker and must have said something terrible because the broker then called me and told me to stop threatening the end-client.

I got my check the very same day!

The lesson I learned: threaten the client, not the broker. You broker will do ANYTHING to make you stop threatening his client.
obviously anon for this Send private email
Saturday, June 21, 2008
 
 
"The company that is paying you must pay state unemployment tax for each state they operate in."

If you're corp-to-corp THEN YOU ARE THE COMPANY. You are responsible for the unemployment tax, etc., not the broker, etc.

You can sue in either state. If your contract has a clause that says the law of X state will be used in all disputes, you can still sue in either state; it's the judge's responsibility to apply the laws of the other state to the case (regardless of where you are suing).

Monday, June 23, 2008
 
 

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