- 20 - in order to carry on its business.6 Machise was not required to pay the compensation fee until April 30, 1981, 4 months after MIT 80's obligation to furnish employees and independent contractors had ceased. Additionally, the employee leasing agreement allowed Machise to defer payment of this fee for more than 10 years, until December 31, 1991, if it paid a 10-percent per year late charge on all deferred unpaid portions of the compensation fee. Thus, Machise was not required to, and did not, make any payment of the compensation fee to MIT 80 during 1980. MIT 80, under its cash method of accounting, accordingly reported a loss of $2,247,552. The loss consisted of the following: Salaries and wages $456,618 Rent--independent contractors 1,673,742 Payroll taxes 35,877 Pension plan 37,109 Insurance 41,823 Professional fees 2,383 Total 2,247,552 6Fred explained that, with respect to the employee leasing partnerships, all but 5 percent of the compensation fee constituted interest paid by Machise. It purportedly owed such interest because of the partnerships' advances of payroll costs during their first-year operations. This interest component is to be distinguished from the "late charges". The late charges represent interest imposed as a result of Machise's election not to pay compensation fees in years after completion of the respective partnerships' obligations to supply workers.Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Next
Last modified: May 25, 2011