From: Mari Sent: Tuesday, September 18, 2007 6:36 PMTo: Jayme.White@mail.house.govCc: Melissa.Mueller@mail.house.gov; cks@steuartlaw.com; HQ-ORF@ci.irs.gov; employerfraud@lni.wa.gov; Maria_Cantwell@Cantwell.Senate.govSubject: [S.2044.IS] Written Testimony for the "Independent Contractor Proper Classification Act of 2007"

Mr. Jayme White, Tax Aide toThe Honorable Jim McDermott1135 Longworth House Office BuildingWashington, DC 20515

Dear Mr. White:

Thank you for taking the time to speak with me on Friday September 14, 2007 regarding the proposed legislation to protect workers who are wrongfully misclassified as Independent Contractors (ICs).

Per our conversation I’m submitting the letter below for the official record. As part of my submittal I’ve attached copies of the applicable pages taken from Secondary Supplier Agreement which are referenced in the body of my letter below. The pertinent sections are highlighted for your convenience. I’ve also included pages 10, 11 and 12 taken from the Defendant’s Motion for Summary Judgment which was granted on June 8, 2007.

While I understand and wholeheartedly agree that workers designated as ICs so that companies can avoid the expense of employer side taxes and insurance payments yet are still treated as at-will employees need to be protected, there exists a large group of workers who either directly or through their own companies are bona fide independent contractors who are also being treated as at-will employees and also need protection.

There are many unscrupulous companies who intentionally lure individuals into working for them as Independent Contractors. They lead them to believe that they will be allowed to operate in accordance with the laws governing ICs. Specifically there are IRS tax rules and various state laws which stipulate that ICs have the right to control the manner in which the work is performed, the hours during which they work as well as other designations. These companies do this for the sole purpose of escaping the financial responsibility of paying benefits, employer-side taxes, and other legally required insurance payments, while never intending to allow the worker to perform in any manner other than as their at-will employee.

Entering into a contract with the intention of never fulfilling the terms is the very definition of “bad faith” which refers to dishonesty or fraud in

a transaction and is a violation of most state and federal labor laws. I will demonstrate precisely how they do so below.

I am a Microsoft Certified Solutions Developer and as such I apply and interview for positions in which I provide my skills as a software developer to various companies, generally through recruiting firms. In December 2002 I created the corporation Aegis IT Solutions which is a Microsoft Registered partner. I created this corporation for several reasons – (1) so that I could work for my own company, (2) build it up through customer referrals and (3) eventually obtain Microsoft Certified Partnership status. One of the big advantages of working through my own company and working on a corp-to-corp contractual basis is that a contract, at least in theory, is supposed to provide a little more job security than simply being an at-will employee.

The reality though is that in spite of the fact that every single contract I’ve worked stipulates that the relationship between the retaining company (the company that pays my invoices) and Aegis IT Solutions is that of “independent contractor”, they then take measures, via the language of the contract which can then be subverted and through actual deed, to treat the workers as at-will employee. As a matter of fact, I’m submitting as attachments to this email, information obtained from actual court documents in which Cingular Wireless admits that even though the contracts used for retaining workers stipulates that the relationship between all parties is that of “independent contractor” that it never intended and in fact refused to allow any of it’s workers, including temporary and contract workers, to operate as anything other than at-will employees.

They accomplish this goal of designating a worker as an IC and still retaining at-will employment rights using several means.

First the worker is not even allowed to enter into the contract with the recruiting firm (in this particular case TEKSystems doing business out of Bellevue, Washington) until submitting proof that the corporation that is to be designated as the IC has a current insurance policy of $1,000,000+. TEKSystems also required that it as well as Cingular Wireless be listed on the insurance policy as additionally insured parties. (please see the attached document entitled Addendum to Secondary Supplier Agreement) Then they required submission of the last 4 IRS tax forms 941 filed for Aegis, Aegis’s master business license for Washington State (UBI number), a certificate of good standing from the Secretary of State as well as several other documents.

The contract also stipulates that Aegis bear the financial responsibility for all employer-side taxes (please see page 1, paragraph 2 of the attached document entitled Secondary Supplier Agreement).

In addition to the requirements of TEKSystems, Aegis IT has an account with the Washington State Department of Revenue. It pays quarterly taxes to the

state on all revenue it generates.

Then after having escaped the financial expense of having an actual employee by contractually shifting the burden onto the Independent Contractor as well as removing any protection that is afforded to employees from agencies such as the EEOC and in Washington state, the Human Rights Commission, these employers then began to abuse the worker’s new “status” by then treating the purported Independent Contractor as an at-will employee.

In my case, in all initial negotiations the discussions included a flexible work schedule. These discussions occurred between the Technical Recruiter for TEKSystems & Aegis, the project supervisor at Cingular, and with the Customer Supervisor of TekSystems. Furthermore, upon starting the work the flexible schedule was standard operating procedure all in conformance with my status and legal rights as an Independent Contractor.

After having worked a flexible schedule for approximately 6 weeks, Cingular Wireless via TEKSystems demanded that I begin working a set schedule of 9 to 5. When I informed them that I had a contract that stipulated that I (meaning Aegis, my company) had the autonomy to operate under the laws that govern an independent contractor thereby allowing me to set my own schedule, their reply was to conform or they would terminate my contract, which they ultimately did.

Before they terminated the contract they concocted a story that I was being let go because I “lacked the ability to perform my job”. This statement was later modified in their response to our court complaint to “she lacked the ability to perform her job because she could/would not come in at 9:00” a direct violation of IC laws unless waived by the contract.

They have also listed, in various other documents, the reasons for termination of my contract as “the project was cancelled” and that the client’s “requirements for the job changed”, neither of which is true. One of TEKSystems employees, Mr. Justin Born, actually told me on the day I was informed that my services were no longer needed, that they were going to falsify my record to reflect that the employer’s requirements for the project changed. They evidently did so.

In the defendant’s Motion for Summary Judgment the defendants reveal what their true intentions were from the beginning. The motion states on Page 11 Line 16.5 “Put simply, the Secondary Supplier Agreement allowed Cingular the same right regarding the individuals placed by TEKSystems as it had regarding its direct employees: each are subject to removal at the will of Cingular, for any valid legal reason. In other words, the Primary and Secondary Supplier Agreements affirm Cingular’s right to at-will employment even for temporary and [independent] contract[or] workers…”

This intentional language design, which is incorporated into the agreements is clearly an abuse of the laws that govern workers who are classified as Independent Contractors. And just so that there is no misunderstanding, Cingular’s “valid legal reason” for terminating the contract with Aegis is the previously quoted reason that “she lacked the ability to perform her job [defamation per se] because she could/would not come in at 9:00.

As an employee of Aegis and not an employee of either TEKSystems or Cingular, neither one of them had the legal right to demand I work any specified hours per the Secondary Supplier Agreement which stipulated that our (Aegis & I) services were begin retained as an Independent Contractor . That would constitute a change of the terms of the contract which both parties have to agree to in writing per the Secondary Supplier Agreement. Therefore the defendants reason for the termination of said contract is neither valid or legal since they’ve admitted that there was no misconduct involved. Their stated reason was simply a pretext to be used to deprive me of my rights as an independent contractor (via my company Aegis IT) and the remainder of a semi-lucrative 12 month contract.

Lastly, the Secondary Supplier agreement in paragraph 11 stipulates that the agreement can be cancelled by Secondary Supplier only in accordance with the terms of the Primary Supplier agreement to which the defendants readily admit plaintiffs Aegis IT nor Akmal are a party yet the Primary Supplier can cancel at any time without cause upon no less than 5 days notice.

Cingular and TEKSystems couldn’t even be bothered to comply with this last aspect. They treated me as their at-will employee by terminating Aegis’s 12 month contract little more than 2 months after it began and with no notice at all.

As I’m sure you’re aware, the ONLY recourse for Independent Contractors who are abused by companies in this manner is to file a lawsuit. Lawsuits are expensive and quite frankly locating case law and precedents in support of Independent Contractors who actually want to be allowed to operate as Independent Contractors instead of employees has proven difficult. Most of the case law in which the worker prevails is for Independent Contractors who want to be classified as Employees.

I don’t know the nature of the legislation you’re proposing but I can tell you from my perspective as a small business owner/independent contractor that designating an agency to either investigate or intervene in these matters when the contractor can clearly show an abuse of their rights would be a godsend.

This lawsuit not only has me in debt but I’ve also been blacklisted. I was told just this month by recruiter Chris Bloomquist of Robert Half International

in Seattle who placed me on a temporary project earlier this year, that he can no longer work with me because of what’s being said about me by people on the projects I’ve worked on previously. Now the case is currently in the assessment phase of the 9th Circuit Court of Appeals. It is estimated that the length of time until a decision is reached is 18 to 24 months pushing the projected timeline to July 2009.

If you need any additional information or documents from me to clarify any of my communications, please feel free to contact me. I’m willing to assist you in any and all ways possible, including providing testimony.

Sincerely,

Ms. Mariyam Akmal, President Aegis IT Solutions, Inc. [address block removed]

cc: The Honorable Jim McDermottChairman, House Ways and Means Subcommittee on Income Security and Family SupportB-317 Rayburn House Office BuildingWashington, D.C. 20515

The Honorable Richard NealChairman, House Ways and Means Subcommittee on Select Revenue Measures1135 Longworth House Office BuildingWashington, D.C. 20515

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