The law recognizes three broad categories of workers: non-exempt hourly employees, exempt salaried employees, and independent contractors. An employer’s obligations change depending on the classification, and many employers misclassify workers to avoid their legal obligations. Misclassification deprives individuals of the many benefits that employees enjoy. Misclassified employees are often denied access to employment benefits such as family and medical leave, overtime, minimum wage and unemployment insurance. Similarly, misclassified employees are denied certain protections provided by employment laws prohibiting discrimination, retaliation, and wrongful termination.
As an independent contractor, an individual is equipped with the skills and resources that allow him or her to be their own bosses. They are considered to be independent from the employer that hired them or self-employed. Independent contractors have the right to control the type of work that will be done and how it will be done. In contrast, a person is considered an employee if he or she is subject to another’s right to control the manner and means of performing the work.
While many independent contractors are classified properly, some workers may, either mistakenly or purposefully, be classified as “independent contractors” when they are, in fact, employees. To determine how to classify a worker, courts typically look at how economically dependent an employee is on the business and how much control the business exercises over the employee.
Misclassification can have serious consequences for employees, and can result in violations of federal and state laws. Employers that have misclassified their employees as independent contractors may violate the Fair Labor Standards Act (“FLSA”) for failure to properly keep records, nonpayment of the federal minimum wage, and nonpayment of overtime. Our employment misclassification attorneys have represented workers and recovered millions of dollars in class action lawsuits for employees who were misclassified as independent contractors.