Do you work for a healthcare company? You might be a nurse, technician, caregiver, aide, clerical worker, skilled tradesperson, or other necessary worker. If you are unsure whether you are being properly classified as an employee or independent contractor, it is important for you to find out, as this can have a significant impact on your earnings – particularly overtime pay. Your first step is to determine the type of employment information statement you receive at year’s end, either a W-2 or a 1099. Let’s go from there to assess your situation.
Independent Contractors and Employees
When those who run healthcare facilities consider staffing needs, they may decide they are understaffed and need employees who will stay awhile, or they may need several nurses or aides to temporarily get past a busy stretch. If you are hired as an employee, your employer controls how you do your job, and you are entitled to benefits and protection under employment laws. You perform your job using the facility’s tools. You receive a W-2 at the end of the year for filing your income taxes, and your Social Security, federal taxes, and other deductions are itemized.
If you are classified as an independent contractor, you control how you perform the tasks you have agreed to, and you can even work for more than one client at the same time, because you are the boss and run your own business. No deductions are made from your 1099, and you do not receive overtime pay or benefits business owners offer to employees. You pay for your insurance and Social Security taxes and use your own tools to complete a job.
IRS Guidelines to Identify Worker Misclassification
The Internal Revenue Service (IRS) deals with employee misclassification routinely because unscrupulous employers save a lot of money by classifying you as an independent contractor. They do not have to match taxes and deductions or pay for benefits. Some factors to consider if you think you have been misclassified as an independent contractor when you are a healthcare employee include:
- Healthcare employers have a set system for doing things, evaluate performance, and provide training when necessary
- Independent contractors invest in healthcare opportunities and can make a profit or lose an investment
- Independent contractors bear expenses incurred to do their work
- Written contracts can clarify the relationship but are not the only way to identify misclassification (just having an independent contractor agreement does not necessarily mean the legal requirements are met) ; whether benefits are paid indicates a worker is an employee, as does whether the worker provides long-term services that are integral to the business
Do you see your situation in these examples? Identifying employee misclassification in healthcare can be tricky if you relate to some factors attributed to employees and some to independent contractors. Our free and confidential review will empower you with the valuable information you need to be treated fairly in labor matters.
Two Questions to Ask Yourself
The Fair Labor Standards Act (FLSA), under 29 CFR Part 795, suggests two questions to ask yourself and determine if you are an employee or independent contractor.
How much control does the company have over your work?
If you are economically dependent on your employer, and they oversee your schedule and how you do your work, you are most likely an employee.
Will you profit because of your initiative?
If you invest in your endeavor, for instance, you rent space in an elder care facility, purchase equipment and provide light exercise to residents, you can directly profit from this venture’s growth, or if things do not go well, suffer a loss. You are likely an independent contractor of the healthcare facility.
Employee Misclassification Harms You Now and Over Time
You have every right to be paid for what you contribute to a business and reap the benefits they pay to good employees, including overtime pay. If you choose to offer your services but retain control over how you work, what you invest, and handle your own deductions, you are entitled to work as an independent contractor.
The problem arises when a healthcare facility misclassifies you as an independent contractor when really you are an employee. You receive no benefits now, and you are deprived of any overtime pay that you should be receiving. If you’re self-employed, you pay the combined employee and employer amount.
Use our convenient chat function or fill out our form for a free and confidential review of your situation. Our skilled unpaid overtime wages attorneys can help no matter where you live.
