Freelance translators and interpreters are NOT employees August 15, 2011
Posted by Jill (@bonnjill) in Business practices, Translation.trackback
Sorry for the recent social media silence. After finally getting my new desktop computer up and running (yes, I am a dinosaur who prefers working on a desktop…) I have been bogged down with work. When I haven’t been translating I have been trying to relax and enjoy the summer.
That said, I had to break my silence when I found out recently that Language Line is claiming that translators and interpreters are truly employees attempting to defraud the government. Please pardon my French, but this is total and utter bullshit.
I know that Language Line likes to schedule their employees on shifts to cover their phone interpreting needs (don’t even get me started on the hourly pay, which I hear is BARELY over minimum wage in some cases), so in this case they truly ARE Language Line employees. However, that does not mean that ALL freelance translators and interpreters – or even all of the translators and interpreters who work for Language Line – are employees. If those Language Line employees are only working part-time they are most likely issued W-2s for their services. If not then Language Line has no right to claim that they are employees. Those part-time Language Line employees are also free to work for other agencies and most likely receive 1099-MISC forms for their work. They then report the W-2 income and 1099-MISC income in separate sections of their IRS tax returns. That’s the way it works – whether you are freelancer translating/interpreting full-time while working part-time at a book store, teaching part-time at a school, college or university or even work part-time for a translation agency.
In my case, I regularly work for at least 14 different agencies (not counting agencies that perhaps contact me once or twice a year with a translation request). I am issued 1099-MISCs from all my agencies who pay me $600 or more a year for my services. I submitted seven 1099s in 2009 and ten 1099s in 2010 as part of my tax returns. According to my tax preparer at Liberty Tax, I had “30 [agency clients] in 2009 and about the same in 2010 not reported on 1099s.”
I am a full-time freelance translator. I am free to accept or turn down translation jobs based on my availability and whether the texts are within my fields of specialization. I work when I want and how I want. I use the translation software I want. I track my income and issue reminders when invoices aren’t paid on time. And I pay my own taxes to the federal, state and local governments based on my earned income from all the agencies I have worked with that year both in the United States and abroad (whether or not they have sent me a 1099-MISC). Let me repeat that – I claim ALL of my income earned both domestically and abroad. I have NEVER attempted to defraud the federal government. You simply don’t screw with Uncle Sam.
Correct me if I am wrong, but freelance translators and interpreters who do not have scheduled shifts with a company all fall under this category. We are FREELANCE translators and interpreters, which means we are contractors who are free to work for whomever we want and however we want. This also means we are running our own businesses, whether it be as a sole proprietor, an LLC or an S-Corp. I am frankly offended by Language Line’s claim that because I am a freelance translator I am trying to defraud the government.
Feel free to weigh in with your comments below. The folks who are working hard right now to get translation-friendly legislation passed would appreciate your opinions to use as ammunition.
Articles on the subject:
* http://www.huffingtonpost.com/louis-provenzano/open-letter-to-irs-end-em_b_675776.html
* http://www.huffingtonpost.com/louis-provenzano/open-letter-to-congress-t_b_766612.html
* http://contractinterpreters.com/2011/04/12/interpretertranslators-as-independent-contractors-or-employees/
* http://www.forbes.com/sites/robertwood/2011/08/16/irs-narrows-independent-contractor-relief/
Musings from an overworked translator 
As a translator, I could not imagine a circumstance in which I would be considered an employee rather than a freelancer unless I were in-house. I have actually worked from home as a full-time employee and, in fact, my husband does this now. It is really quite simple to tell the difference in attitude and I would not trade for the world.
As an aside, I went from a laptop to a desktop earlier this year as it would have cost 3x more to buy a laptop with the oomph of this desktop machine. I still have the laptop for traveling, but cringe at the idea of working w/its small screen.
I prepared Jill’s tax return and her tax classification is self-employed, sole proprietor or independent contractor, it all means the same things.
Here are some factors that show the IRS a worker is a common employee:
* The worker follows instructions about when, where, and how to work.
* The worker is trained by the employer to perform services in a particular manner.
* The worker’s services are integrated into the business operation, or a continuing relationship exists.
* The worker renders services personally (she can’t subcontract work out to someone else).
* Assistants are hired by the business, not the worker.
* The worker has set hours.
* The worker devotes substantial time to the employer.
* Work is done on business premises.
* The worker submits reports regularly.
* The worker is paid by the hour, week, or month, unless these are installments of a lump sum amount agreed to for the job.
* The business pays the worker’s business or travel expenses.
* The business furnishes tools, equipment, and materials.
* The business can fire the worker, and the worker has the right to quit, at will.
On the other hand independent contractors are responsible for their own tax reporting and are treated as business owners themselves. The IRS says these factors tend to show a person is an independent contractor:
* The worker hires, supervises, and pays her own assistants.
* The worker is free to work when and for whom she wants.
* The work is done on the worker’s premises.
* The worker is paid by the job or on straight commission.
* The worker has the risk of profit or loss.
* The worker does work for several businesses at one time.
* The worker’s services are available to the general public.
* The worker can’t be terminated early, except for breach of contract.
Brilliant post. I think this is partly due to the fact that people who *are* employees think that anything other than being an employee is odd, rare, scary or whatever. I love the fact that I can take a vacation whenever and wherever I want, and all I need is a laptop, an Internet connection and a few spare hours and I can keep on making money, or not if I so choose. I’m sure there are a lot of management nine-to-fivers at this company who simply envy our freedom.
During a recent amnesty which was granted by the Internal Revenue Service (IRS) to wealthy individuals who have been hiding income in offshore havens such as banks in Cayman Islands, or banks offering secrecy arrangements to customers in Switzerland, City of London, etc., for the sole purpose of tax avoidance, thousands of self-employed freelance translators came forward and declared millions of dollars that they have been hiding in offshore havens. These freelance cheaters of course did this only out of fear that they could be caught and end up in jail.
Especially prevalent among these tax cheaters were freelance translators who usually find work on online venues such as Proz.
It was estimated that the losses to US government from tax evasion by freelance translators who work mostly for customers via Proz alone amounted to some 2.4 billion dollars in the last two years.
This is in stark contrast to CEOs and wealthy individuals who mostly inherited their wealth who would simply never cheat on taxes because this is something that is completely incompatible with their patriotism.
Steve, stop. My sides hurt from laughing so hard! You had me going until you mentioned Proz.com. We all know no one can possibly become a millionaire from jobs off that site 🙂
I’m not sure I am getting the connection between ProZ and tax evasion. I have found, and been found by, many clients on ProZ and yet have always filed my taxes honestly.
I guess I could avoid the “online venues such as ProZ,” but I kind of like having a place to hang out with my fellow language geeks. Don’t let the job listings fool you. The gutter patrol may be the loudest voice, but it is certainly not the only one.
Jen, I am assuming that Steve’s tongue was firmly planted in his cheek (meaning his intent was humorous and should not be taken seriously). With all the low bidders on ProZ I find it seriously hard to believe that anyone there could squirrel away millions of dollars in off-shore accounts. Unless of course I’m wrong and Steve was serious (but considering the comment about billionaires who would never consider cheating on their taxes I have a feeling my supposition is correct)…
I was kidding, of course.
Freelance translators don’t make much money and translators who work through Proz (i.e. for peanuts) don’t make any money. You can’t really hide much when you’re making peanuts.
I saw an interesting interview on Democracy Now! recently of some British dude whose name eludes me now who wrote a book about how rich people evade taxes by parking their money in secret offshore accounts. American uber-rich hide their money in the Caymans, City of London and even Nigeria, while filthy rich Europeans hide their ill gotten gains in banks in US. Banks in many countries has special arrangements for these customers and they send sales representatives abroad to woo such customers. As governments worldwide are trying to find out about this hidden money, some progress has been made and Switzerland finally decided to discontinue their tradition of anonymous numbered accounts under mounting pressure from US government.
It is always the rich who cheat the most on taxes because they have most of the money. And they are really creative about it.
I saw another program on French TV recently (I think it was Envoye Special) about rich German and French people who buy a house in Switzerland and change their permanent address to that house even though they may live there only a couple of month a year so that they could become Swiss tax payers because taxes are much lower in Switzerland than they are in France or Germany.
Rich Europeans are about as patriotic about their taxes as rich Americans.
Do you have a link to the Language Line claim, Jill? I think it would be rather difficult to comment on this strange story without actually reading what LL said.
Here for one: http://www.olmsteadwilliams.com/thebigmouthblog/2011/05/19/language-line-services-issues-statement-in-response-to-lsa-claims/
“Under federal law and the law of most states, workers who are controlled by the companies they work for legally are employees and not contractors. In the language interpretation industry, this control takes the form of ongoing training, scheduling, performance evaluation, and requires the following of rules designed to protect customer secrets. LSA’s ‘victory’ in this case means nothing more than it was able to escape having to pay the taxes and employee benefits a responsible interpretation company should pay. Language Line Services, the company that founded the industry and is the largest company in it, believes that companies like LSA that avoid these responsibilities are unfair to interpreters and to the people of the states who would benefit from the payment of tax revenue.”
I’ve written one of the people fighting them in Kentucky for more information and will post more links as soon as I get them.
Jill, I don’t quite understand your indignation about the classification or misclassification of translating and interpreting hamsters unless it has to do with the following:
Many if not most translators and interpreters have the worst of both worlds: they have to behave as if they were obedient, boss-fearing employees if they want to have a constant supply of work from an agency, but they are responsible for full payment of their taxes as they have no benefits.
Sometimes the agency and the translator get audited by the IRS if the agency was the main or basically the sole employer of a freelancer. I had a friend who was in this situation many years ago because he was working mostly (more than 90%) for only one agency on one monster project for quite a few years.
Eventually, the project was discontinued by a genius manager who decided that GE no longer needed to know about the technical status of nuclear reactors that were made and installed by GE (yes, in Fukushima). This happened to this friend of mine in early nineties.
But you obviously are a freelancer if you receive 16 1099 forms from various companies, as are most freelancers. Since I receive at least as many 1099 forms every year, I am obviously no employee either.
But in some cases the freelance status is questionable and the IRS goes after the employers because it obviously wants to recover as much in taxes as possible.
If Language Line gets its way and freelance translators are viewed by the government as employees unless they can prove otherwise I see a whole lot of audits in our future and want to avoid that as much as possible.
I feel your outrage. Because so many of the big government contractors have taken so much outrageous advantage of their government contracts for so long, the smaller operations now have to feel the heat. That seems to always be the case. You have kept your business clear and above board, good for you.
As a freelance translator, if I work for an agency, and am under their rules, then you are still an employee.(Regardless of IRS form).
When you can develop and attain a full string of private clients then you have a business. This is what everyone should strive for. Not be at the mercy of agency work.
By the way, I did apply for Language Line, and it is insulting what they start you with. $7.25/hour. I get that at Wendy’s.
Teresa,
I would strongly recommend that you doublecheck that with an accountant or tax preparer. Having only a single client does not make you an employee and most of the rules of an agency do not meet the test of an employer/employee relationship.
wow!!! I feel cheated, like as if I am being raped!!!!! I was at the verge of quiting for LLS today!!! if it wasnt because I have expenses to pay for I would of quit already and go freelance. I wouldnt care howmany 1099 I would get because I have always done my taxes anyway… I am good at what I do and not only want a carrier out of it but a business with a promising future. LLS pays me $8/ 32mins and .25cents thereafter. A rediculus pay for all the bullshit I put up with everyday.
Okay. I can understand that you don’t like what Language Line Services said. However, I do have a question. Language Line Services do pay their freelance interpreters, don’t they? I want to be sure that I can trust them, because I’m looking to do the same thing you’re doing. I speak Spanish and English, and I’ve done linguist work in the past in these languages. So tell me. Is Language Line Services reputable or a scam? Do they pay their freelancers in a timely manner?
It’s a reputable agency, and they do pay their freelancers. They just pay wages that are more equivalent of McDonald’s than would be befitting of a professional interpreter.
This is ridiculous! im a contractor with LLS.I HAVE to follow LLS rules..and i get ZERO benefits? ?how can LLS point finger accusing other company while they are doing the EXACT same thing??did i misunderstand something here?n
i have a full time job as a social worker but also I have just signed up with Language Line to earn some extra cash whenever I can. however Language line do not tax so am a little confused whether I need to pay tax some other way or not. I already pay tax from my permanent contract as a social worker so do I need to pay for this one too? Can you help!
You will need to report it as additional income. I’m not sure how taxes work in England, but in the U.S. we have a box where that income would be reported on our tax form.
Okay, so I’m quite confused, I’m even shocked to see that this thread is still alive.
I have a question, I don’t know much about paying taxes. I’m a freelance translator, and I’m about to apply for a company that localizes Japanese games to English. Their based on Japan, do I still need to pay my taxes in my country? I mean, I’m really lost here. Are there lawyers that I can get or specialist to help me with my taxes? I don’t want any trouble with the authorities since I’m planning to get a citizenship on Japan.
Yes, you need to declare ALL of your income, no matter where the company is located. Until you become a citizen you must file in the country you live. But even then you may have to still file taxes in the U.S. if you have dual citizenship as well. It isn’t that difficult. No need to see a lawyer. I suggest visiting http://s528541873.initial-website.com/business-101-for-translators-interpreters/ and doing some reading.
Thank you for the info Jill. 🙂