Nothing is wrong with it as long as you're actually working as a contractor and you're being compensated i.e. more than an employee would. So if the flight school is going to expect you to teach and only teach i.e. no cleaning up the office or working the counter or washing the planes. And they're going to let you set your own schedule and rates, then being a contractor is fine. But in most cases, they want you to be an employee but pay you as a contractor which is illegal and a rip off.
Most newbie instructors don't know what they don't know. Before you get ANY farther, grab the book the The Savvy Flight Instructor and look around for a school where you'll be around instructors that you would like to emulate and make friends of them. My CFI mentor said he thinks the whole system is backwards and new CFIs should be buddied up with older instructors until they have their own experience to draw from and at this point I think that was very wise of him. If you think about it, and dig around a little bit, this is exactly what the USAAF figured out decades ago in WWII - sending experienced combat pilots back to teach the new classes of cadets. I don't want to spoon feed rote questions for you to ask the school, but if you want to ask questions, ask the school questions that will tell you if you will learn and thrive in their environment while also making sure you get enough to eat. If you become a good instructor, you can branch out on your own after you've gotten your feet under you. Take good care of your students and you'll be able to go where you eventually want to get.
That's another con of the school I'm currently at! And looking at the IRS rules for independent contractors our instructors don't qualify as a contractor!!
That was actually a big help! It was something I'm concerned about, but completely forgot to add that on my list.
I jumped the gun on my current school, and I actually got a job as a dispatcher which has opened my eye to A TON of things I'm not a fan of. Honestly my school isn't that bad as a student, but getting to know the instructors there, primarily foreigners who are stuck there due to visa stuff, I've learned the dark side of the school and they all tell me I should get out ASAP.
I was thinking the same thing. I'm sure the IRS does bust businesses on this, but I've never known of a case. Certainly none of the shysters I've ever worked for were ever looked at. I always assumed it took a complaint from an employee or ex employee to even get it on the radar of the IRS.
OK, I should say, "it COULD happen," not it WILL happen. But I am aware of several cases.
The first is from my hometown, many years ago, when I lived in NC. Guy running a dry cleaning business paid his people as contractors and was eventually hammered for it. He lost the business for back taxes.
There are others: a neighbor of mine, a carpenter/handyman who hired people on the fly to help him, and didn't take out taxes on them. He ended up on a repayment plan to the IRS.
Radio stations, especially small town jobs, have been busted for this, too. I know of a couple of cases.
The most common scenario is that a disgruntled worker gets annoyed at how much he/she has to pay at tax time. They ask around -- maybe even call the IRS -- and are told that they were an employee, and that the person paying them should have withheld. In that case, the IRS goes after the business that had them working "on contract."
Yes, it DOES happen all the time. I've seen it. It may not happen right away, and yeah, it's possible that a really lucky businessman will never get caught. But it's the equivalent of speeding in heavy traffic, in a construction zone, with cops all over the place keeping an eye on things.
Well that's the difference between you and me. If they want to you be an employee and they want to treat you as an employee and they want to hold you to the expectations of an employee, then they need to pay you as employee. That their margins are low and that the costs of paying someone as an employee are higher for them does not excuse them breaking the law at your expense. If the extra costs you had to pay as an IC didn't hurt you, goodie for you. Those costs sure as **** made life more difficult for me.
I think classroom-style CFIs are harder to pigeonhole as contractors.
I believe I made exactly that very clear in my first post in this thread.
If that were true, there would be no need for labor laws. And yet they exist. Hmmm.....
The free market helps. Sometimes. But not always. The bottom line is the practice is illegal. 'nuff said. Just because you're ok with it doesn't mean its ok.
