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Comment by startupdisaster | Hacker News Reader

I'm not "in" any company, though. Or am I? I've never signed any agreement. I haven't been paid.

You don't have to sign a contract for a counterparty to claim that a contract exists; worse still, your partner can claim, even the absence of a paper contract, that there are fiduciary duties you owe to each other. It helps you that you've never received consideration from your partner, but I doubt it helps so much that he can't take you to court out of spite.

Your "friend" might even claim you were an employee of the LLC.

Not unless he paid him regularly, offered him health benefits, and paid unemployment insurance. A claim like that could land his "friend" in jail.

This comment makes no sense. I'm an employer. I assure you, you do not need to offer health benefits, pay unemployment insurance, or even pay on a regular schedule for someone to be classified your "employee"; having seen unemployment insurance SNAFUs firsthand, let me assure you that "jail" doesn't enter the picture here at all --- they simply send you a bill.

> This comment makes no sense

I think tptacek is correct concerning the legal issues here. In any case, I didn't say the "friend" would prevail in his claim that the OP was an employee of his LLC, nor that he wouldn't suffer unintended consequences as a result of making the claim.

Failure to pay unemployment insurance can lead to jail time in many states. Quick search on Google yields an example for MA:

http://www.ehow.com/list_6306349_massachusetts-state-unemplo...

"Employers who fail to pay unemployment insurance premiums can also be ordered to serve time in a state prison."

You can search for the legislation on Mass.gov if you like.

I'm sure that if you refuse to pay when the state government escalates from reminder notice to nastygram to series of phone calls all the way to "takes you to court", and you do something that indicates to a judge that you were overtly trying to shirk paying, then yes, you could go to jail.

The point is that it's not relevant to the situation at hand, because 10 months before that could ever happen, the "employer" is going to get a notice saying they owe some trivial amount of money, and they're simply going to pay it to go away. You would have to be made of stupid to end up in jail over employment taxes.

Note that you're replying both to a lawyer (in dc's case) and to someone who's dealt with this exact situation (in my case); you may want bigger guns here than a pay-per-word Demand Media article.

If you are an employer employing employees, you have to pay your share of Federal and State taxes on their behalf, including FICA and unemployment insurance. Failure to do so will result in penalties that may include jail time. (http://answers.google.com/answers/threadview/id/775884.html). Back to the issue, if the "friend" insists that the op was an employee, he would have been liable for said taxes. Thus he would be incriminating himself. You don't have to be a lawyer to figure that out.

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