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Investment guru Jim Simons, who earned $2.5 billion in 2009 on his way to amassing an $8.5 billion fortune, is being accused of nickel-and-diming New York state out of unemployment insurance payments by incorrectly classifying the security guards at his hedge fund’s two offices as contractors, The Post has learned.
Renaissance Technologies, the $15 billion hedge fund started in 1982 by Simons, 72, was found by the state Labor Department in 2009 to have been mischaracterizing the guards for years, documents show.
The move meant the company paid less unemployment insurance and other labor cost payments than it would have if the guards were tabbed as employees.
Employment-law experts, noting the number of guards and how much they made, estimated the back taxes, including penalties, might cost RenTech up to $100,000. Assuming a 40-hour workweek and his $2.5 billion in earnings in 2009, Simons was in position to admit the error and pay that sum — which was the equivalent of five minutes’ pay.
But Simons, who last year retired as chief executive of RenTech and is now a nonexecutive chairman, decided to appeal the ruling. A hearing before the state Unemployment Insurance Appeal Board is scheduled for today.
Simons, estimated to be worth $8.5 billion by Forbes, is frequently ranked among the hedge fund industry’s best-paid managers. In 2009, the last year the rankings were available, Simons was the third-highest earner with $2.5 billion, according to AR Magazine, a hedge fund monthly.
The case of Simons, a math whiz, versus the state unemployment benefit fund came to light after one guard, Louis Marsicovetere, an ex-NYPD officer, left his job at RenTech’s Third Avenue office in 2008 and filed for unemployment insurance.
It was then that Marsicovetere learned RenTech had been classifying him as an independent contractor, not as an employee, state documents show, and that in consequence the company had not made unemployment payments on his behalf and that he was, at first, ineligible for jobless benefits.
After some back and forth, state labor officials then ruled in favor of Marsicovetere in April 2009, telling RenTech to amend its quarterly reports on the former guard and “all other persons similarly employed” since 2006, when Marsicovetere first started working there.
A RenTech spokesman, who called the case a “routine administrative hearing related to an individual,” said commenting would be “inappropriate.”
Documents show the case rests on such minutiae as which party set Marsicovetere’s hours and pay, and whether the outfit he wore to work can be considered a uniform. The former guard claims he was an employee and the uniform each guard wore included a tie with the RenTech logo.
RenTech claims Mariscovetere set his own hours and did not work enough — sometimes as little as eight hours a week — to be considered an employee.
Labor experts say such disputes have become increasingly common as the recession pushes more people to file for unemployment insurance only to learn that their employers haven’t been paying their taxes.