Are Classical Conversations directors under investigation for employee misclassification??

[Loolamay]

I am having THE hardest time finding anything about this online, so I'm asking here. Does anyone have information about whether or not Classical Conversations directors in Missouri are being investigated (by the state labor board) for misclassifying their tutors as independent contractors when they should have been employees? I have only heard this about CC directors in MO. I do not know if it's true - but given the Landry crisis, I'm very concerned. Does anyone have real info on this? 

[momacacia]

Umm, do they even make enough for it to matter?

 

And what happened with Landry? I know they shut down, but was it because of a labor law issue?

Edited August 7, 2017 by momacacia

[HomeAgain]

Umm, do they even make enough for it to matter?

 

That might be the part that matters.

 

[momacacia]

That might be the part that matters.

 

I would think their kid's CC tuition gets factored in?

[Loolamay]

Before I answer, a disclaimer: I'm not a lawyer or a tax expert. Just a mom. I'm answering with info from what I have read online or experienced or heard from a direct source. What I say is true to the best of my knowledge, but I am obviously fallible and may make mistakes in my reasoning.

 

All I know about Landry is that many believe at least a part of the reason they had to shut their doors was because of IRS fees from misclassifying tutors. Carol Topp (Homeschool CPA) mentioned this in her podcast and article about consequences of misclassifying workers. She says:

"I do not know the details of their unfortunate situation, but it seems that there was an IRS requirement for Landry Academy to reclassify their teachers as employees, rather than independent contractors."

Source:http://homeschoolcpa.com/what-are-the-consequences-of-misclassifying-a-worker/

 

As for how much a CC director makes it varies a lot I think. I know my former director, with a full campus, pulled in between $10K and $12K in gross *profit*. With a full Foundations campus (48) and 12, sometimes 20, Essentials students, the net income of the business (the director's business - just that one community) would be around $22,000. Of course the director wild have to pay tutors from this amount. These are just my quick calculations. My director sometimes had 8 Foundations and 2 Essentials tutors. If you look at the article above, just back FICA taxes on 10 tutors over 3 years could be significant. That's just IRS. State income tax would be separate. My point is: yeah, even if they don't make much, the back-taxes could be kinda awful.

 

Carol Topp has another article about one co-op in Ohio being found to be misclassifying teachers. The cost was significant:

http://homeschoolcpa.com/update-on-teachers-as-independent-contractors

 

Thank you both for replying. It sounds like no one on here so far knows if any investigation into misclassification of tutors in MO is happening.

[Loolamay]

Not sure why my comment posted twice. I guess I accidentally hit it twice, but I can't delete, so I'm editing it to this.

Edited August 7, 2017 by AprilDianne

[Southern Ivy]

I asked my friend about this. She's a MO CC director. 

"this happened last summer and the Dept. of Labor did investigate and they closed the case without any changes to our structure, Since that time CC as a whole is making sure we are training people in a manner that is consistent with Independent contractor status"

 

Edited August 8, 2017 by Southern Ivy

[Loolamay]

I asked my friend about this. She's a MO CC director. 

 

"this happened last summer and the Dept. of Labor did investigate and they closed the case without any changes to our structure, Since that time CC as a whole is making sure we are training people in a manner that is consistent with Independent contractor status"

 

Wow!  Thank you for that answer!

[8filltheheart]

I asked my friend about this. She's a MO CC director.

 

"this happened last summer and the Dept. of Labor did investigate and they closed the case without any changes to our structure, Since that time CC as a whole is making sure we are training people in a manner that is consistent with Independent contractor status"

Does that tutors can use whatever materials they want to use and set their own hours? https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined

[Loolamay]

Does that tutors can use whatever materials they want to use and set their own hours? https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined

From that link:

"You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed."

 

So... yeah. When I tutored we were told we could not even print out memory facts for display in the classroom. We had to hand write the facts. I'm hearing this year there is a rule that tutors can't use any technology (e.g. play any of the memory songs from a phone or CD player) in the classroom. So... yeah.

Before I answer, a disclaimer: I'm not a lawyer or a tax expert. 

 

All I know about Landry is that many believe at least a part of the reason they had to shut their doors was because of IRS fees from misclassifying tutors.

 

 

I'm not a lawyer or tax expert or mba either.  I have no inside information about why Landry Academy closed.  

 

He certainly hasn't offered any explanations, though, which strikes me as suspicious.  If I had to guess, though, the fact that he was selling an awful lot of generic credits at something like 90% discount for classes more than a year in the future seems like an unsustainable business practice.

 

And for all of my issues  with CC, they are very straightforward about payment and value -- there's no "pay us today for something years down the road" going on.

[Loolamay]

I'm not a lawyer or tax expert or mba either. I have no inside information about why Landry Academy closed.

 

He certainly hasn't offered any explanations, though, which strikes me as suspicious. If I had to guess, though, the fact that he was selling an awful lot of generic credits at something like 90% discount for classes more than a year in the future seems like an unsustainable business practice.

 

And for all of my issues with CC, they are very straightforward about payment and value -- there's no "pay us today for something years down the road" going on.

I agree. I would have been very suspicious about that aspect of Landry. But at least as ac parent I'd have seen that business model and been like, "whoa!" <brakes squealing>

 

With CC I was three years in not knowing the "business model" and tutored with extremely limited access to knowledge about it. That's largely on me. I should have been more "asky", but this is the thing with Christian homeschooling groups. More often than not,the assumption is that they are above board.

 

The whole thing where CC threatened to sue me really inspired me. I'm taking the LSAT in September and will be hopefully applying to law schools for next fall. The area of most interest to me is affinity fraud.

[meena]

I asked my friend about this. She's a MO CC director. 

 

"this happened last summer and the Dept. of Labor did investigate and they closed the case without any changes to our structure, Since that time CC as a whole is making sure we are training people in a manner that is consistent with Independent contractor status"

 

I don't understand how training could make a difference. CC isn't structured in a manner that allows people to be independent contractors (at least as I understand how IC status is interpreted in most cases). No matter how they are trained they are still under the very strict constraints that CC sets forth, which seems would make them subject to what is an employer/employee relationship. It seems like they are skirting the rules to profit the corporation, but that is just my meager $.02.

[bethben]

I don't understand how training could make a difference. CC isn't structured in a manner that allows people to be independent contractors (at least as I understand how IC status is interpreted in most cases). No matter how they are trained they are still under the very strict constraints that CC sets forth, which seems would make them subject to what is an employer/employee relationship. It seems like they are skirting the rules to profit the corporation, but that is just my meager $.02.

 

They do have pretty strict guidelines as to how tutors are supposed to tutor.  Unless things have changed dramatically, there is no room for large modifications in how they are told to present the material.  It's like allowing a McDonald's worker to have an independent contractor status because he puts 3 pickles on the hamburger instead of 2.  

[yvonne]

 

nm
 

Edited August 5, 2018 by yvonne

[Loolamay]

I wonder what it cost. "No change to structure" does not necessarily equal no cost. The part of that quote that I'm most hung up on is that they plan to better "train" their ICs. according to so many articles "training" an IC is inconsistent with the IC status. I think that's why they changed the "tutor training" name to "orientation". But if the MO investigation really was resolved with no change, there is nothing to be done. CC goes on as before. Changing the face of homeschooling worldwide while its supporters rejoice. I cannot rejoice. Homeschooling for me is about liberty. I see no liberty in CC. But it is not mine to decide. All I can do is try to help the women who have been hurt in CC communities - the dozens who have told me their stories. If you are in need of a support group where you can tell your story openly, I have started one on Facebook. Please private message me to be invited.

Edited August 10, 2017 by Loolamay