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Although the West Texas farmers did not provide the family any forms, the farmers filed 1099 IRS forms to document their own business expenses. The IRS has created a computer program with a two-year time-lag that matches names of the recipients of such 1099s submitted by businesses with the names of wage earners on W-2s or filers of 1040s. Bingo! The Morales’s are the losers. Since they have been employees all their lives, the heads of household have always anticipated their employers deducting the family’s share of FICA tax and contributing their own employers’ share as well. Now the IRS informs them that they owe an 11.3 percent self-employment social security tax \(which for 1987 income is up to 14.1 pensation.” With two years of interest tacked on, the Morales’s are now being dunned for more than $700 \(which they don’t have and legally don’t owe. In addition, until they pay, the Social credit them with any coverage credits toward their old-age pensions or disability insurance payments. When they turn to a local legal services office, they discover that the burden is on them to prove that they were employees of the West Texas farmers. In addition to having to file an amended return, they will have to fill out two very long-winded forms in case the IRS or SSA, at some point in the misty future, finds the time to investigate the complaint. Finally, their wage claims, now almost three years old, might be barred by the statute of limitations. In Texas the most frequent victims of this employer scam are those wlio can least afford it, seasonal and migrant farmworkers like the Morales family. And recent action by the Legislature, amending the Texas minimum wage law and entitling all farmworkers to $3.35 an hour, will probably result in more creative measures by which agricultural employers will postpone the day when they too will have to pay workers $3.35 per hour. An even more sophisticated system is practiced in pickle sheds in the Valley. Taking a cue from their brethren in Ohio, Michigan and Wisconsin, who have elevated this technique to a philosophy of life, shed operators have devised the following practice. In Hidalgo County one large pickle shed decreed that for the 1987 harvest each family or separate individual harvesting pickles is running an independent busness. Asked to justify this classification, the shed managers argued that “pickers are independent contractors, just like plumbers and we don’t tell them what to do. ” In fact, the sheds have adopted a method of payment that largely does away with the need for supervision. Pickle workers in the Valley find themselves turned into “sharecroppers.” Pickling cucumbers are priced inversely to their size: the smallest ones are worth most. Thus on a piece rate, pickers are paid more for larger grades, less for smaller ones and nothing for culls. Over time farmers and shed operators realized that on the average this graded piece rate was about half the contract price they received from the picklers. To save supervisory and paperwork costs, they decided simply to pay the workers 50 percent of the proceeds. In effect, the automatic grading machine replaces the straw boss. Although this arrangement might be lawful \(if the workers were guaranteed $3.35 per hour, regardless of their by taking the further step of calling their pickers “share-croppers.” In reality, this employment relationship bears scarcely any resemblance whatsoever to the regime that plantation owners devised to secure a supply of labor in the wake of the emancipation of the slaves after the Civil War. In particular, the pickle pickers share no risk: if for some reason the pickles were not sold or were destroyed before reaching the shed, the workers would still be paid and the farmers shed would bear the loss. In order to support the fiction of selfemployment, the shed requires each family head, as a condition of employment, to apply for a certificate or registration as a crew leader \(although by statutory definition someone who works only with his or her own family announces that because the workers are self-employed, they are not entitled to the minimum wage. \(Unfortunately many farmworkers already mistakenly believe that when they work “por contrato” on a piece rate they are not entitled to minimum wage even of what we’ll call the Rodriguez family “sharecropping” in the Hidalgo County operation wind up with less than the equivalent of $3.00 per hour each. And that does not include the 3-4 hours that Mr. Rodriguez spends in line every evening waiting for his pickles to be weighed and graded. The shed management also informs them that since each family is running its own pickle picking business, the shed is not responsible for social security. And of course all the workers are excluded from the unemployment insurance system. This re-classification is not, as these two examples show, based on any reorganization of production or introduction of new technology. The same worker can undergo this transformation from one day to the next. Rather, this sleight of hand is made possible by Form 1099-MISC. By filing it with the IRS and furnishing a copy to the worker an employer can create the legal basis for eliminating and shifting to the employees the burden of establishing their entitlement to the protections and benefits of social legislation. What is this magical Form 1099 MISC? According to the Internal Revenue Code, businesses must file it if they pay $600 or more \(for services peremployee. How has it come to pass that this Statement for Recipients of Miscellaneous Income, which was once largely reserved for reporting payments of fees to attorneys, accountants and the like, now does standard service for the humblest hewers of wood and drawers of water? This particular paper scam was made easier by the Revenue Act of 1978. As a result of lobbying by the insurance, real estate, direct sales and other industries, all seeking to avoid intensified efforts by the IRS to insure that such employers pay social security and unemployment insurance taxes, Congress inserted a provision known as Section 530. It was originally supposed to self-destruct after one year but has now been extended indefinitely. Section 530 creates so-called safe havens for employers who have consistently treated employees as independent contractors for employment tax purposes in reasonable reliance, among other things, on a “long-standing recognized practice of a significant segment of the industry.” Congress fortified the safe haven by prohibiting the IRS from publishing any regulations or revenue rulings regarding employment status. With the enforce THE TEXAS OBSERVER 13