Originally Posted by
tennisguru
This was a few years ago. I honesty don't remember what tax forms they gave us. When I get back on Tuesday I'll try to dig through my old tax returns and find out. Or maybe someone else could get their own info faster.
Prior to 2007 you were an "applicant" with a conditional offer of employment contingent upon successful completion of training to include the proficiency check ride. LOFT was conducted as a paid employee after the PC, however DOH and longevity were calculated upon date of the PC, although you were not paid a pro rata guarantee for that day of "employment". David White argued in 1997 that you were not "available" the entire day, therefore were not eligible to receive pay. As a probationary pilot who has just been paying your own way for two months, who are you going to argue with about that?
This arrangement was purely economic based upon the employment drought of the 1990s that allowed airlines to bend you over anyway they wanted. Your seniority date was based upon the first day of attending class and, ironically, your probation ended 365 days after that date, NOT 1 year from the checkride.
In 2007 the company began to pay for hotels and then provide a "stipend" of $400 per week to new hires in training. You were still not an employee and a 1099-Misc was issued the following February. Ironically again, this actually grossed $28 more per month than first year pay at the 75 hour guarantee would have. Employees were liable for income tax withholding and double social security contributions because (for TY2007 at least) the company reported the income as independent contractor wages. Most pilots were unaware of this and probably did not file accordingly. Clearly, training fails the test of an independent contractor but what is a newhire going to do about it? It was the union's position that those payments violated the status quo and that the newhires, who were not employees or covered by the CBA at the time, were not entitled to them so they would not intervene.
A female 2007 hire challenged management in March 1998, was ignored, and then filed a complaint with the IRS while claiming the income as a tax exempt living expense. In 2009 Pinnacle was investigated for improper use of the independent contractor designation by the IRS. The airline argued it was a clerical mistake and that the income was in fact an exempt living expense stipend.
Welcome to the Pinnacle Family, XJ and 9L folks. All bickering aside, I think that you have no idea the profound wall of STUPID and MEAN that you will encounter in dealing with Memphis HQ. Some of these people (DW) are truly pathological in their desire to make your life needlessly miserable. Most are just lazy and dumb.
It's been this way since I got there in 1994 and it hasn't stopped since I left ten years ago. Enjoy.