Social Security's recent relations with the American Federation of Government Employees (AFGE), the union that represents most of its employees have been frosty, to say the least. One of the major flashpoints in this relationship has been the union-run Employees' Activity Association (EAA) at Social Security's central offices. At the request of Senator Charles Grassley Social Security's Office of Inspector General (OIG) recently investigated, to some extent, this relationship. I will not try to summarize the report since I do not understand the issues. I have a feeling that there will be some comments on this matter, however.
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ReplyDeleteGood job, Mr. Astrue, for listening to those who blew the whistle on the EAA abuses and problems of the poorly run (by EAA) child care center. Unfortunately, SSA allowed "for decades" a Federal employee to do no government work; and instead, run the EAA non-profit and for-profit corporations that gave this Federal employee (the EAA President) outrageous perks such as an expense account, dinners, NFL tickets, etc.. Any other Federal employee could be fired for accepting such perks from a corporation with conflicts of interest, let alone not doing any work for a Federal salary and pension.
ReplyDeleteWhen I first came to work at SSA, I was shocked to see what amounted to a shopping mall in rooms and hallways where the EAA used Federal property to sell shoes, handbags, jewelry, etc. to Federal employees who shopped when they were suppose to be working! No more!
ReplyDeleteI found this section of the report particularly distasteful:
ReplyDelete"Unlike other compensated staff, EAA classified one worker as an “independent contractor” and did not withhold or pay income, Social Security, or Medicare taxes on a significant amount of compensation paid to the worker. The IRS requires that payments to independent contractors for services in excess of $600 per year be reported on Form 1099-MISC, Miscellaneous Income (Form 1099). Independent contractors, in turn, are responsible for payment of any applicable income taxes, as well as both employer and employee shares of Social Security and Medicare taxes.
We requested EAA provide all Forms 1099 issued during the audit period. We reviewed available documents and found nothing to indicate that EAA reported the independent contractor’s compensation to the IRS. EAA officials stated that EAA classified this worker as an independent contractor because the individual worked a part-time, irregular schedule. However, we believe EAA did not have sufficient basis for this classification. IRS guidance indicates that anyone who performs a service for you is your employee if you have the right to control what will be done and how it will be done. It does not matter whether the individual works full- or part-time. Further, EAA compensated this worker on an hourly basis. According to IRS guidance, paying a worker a regular wage amount for an hourly period of time usually indicates the worker is an employee (an independent contractor is usually paid a flat fee for the job)."
Anybody affiliated with SSA should know better than to engage in these sorts of shenanigans.