Have you lost wages because of the way that you’re classified? If you have been improperly classified as an independent contractor, you may have lost overtime pay, benefits, and other advantages of being classified as a permanent employee.
An independent contractor misclassification attorney may be able to help you. They can use the law to correct your classification and to recover your lost pay. Before you talk to a lawyer, you may want to know more about how the law on job classification works.
The information below will help you understand what misclassification is, who is likely to face misclassification, and how to get help.
Table of Contents
- What is Independent Contractor Misclassification?
- How can I tell if I am misclassified?
- What Happens when Workers who Are Misclassified?
- What Workers Are Commonly Misclassified as Independent Contractors?
- How Do I Make an Independent Contractors Misclassification Claim?
Let’s begin by looking at what independent contractor misclassification means.
What is Independent Contractor Misclassification?
Independent contractor misclassification occurs when workers who should be considered employees are instead classified as independent contractors (1099 employees).
1099 employees are considered to be in business for themselves, rather than direct employees who are subject to the control of an employer. As a result, they do not enjoy any of the typical privileges and protections that are guaranteed under the Fair Labor Standards Act (FLSA). By avoiding the additional pay and benefits to which employees are entitled, a company can save substantial payroll expense and gain an unfair business advantage over competitors who do comply with the law and properly classify workers as employees.
How can I tell if I am misclassified?
Only certain types of workers are meant to be classified as independent contractors. According to the IRS:
“The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.”
If you are classified as an independent contractor, here are some signs that you may be misclassified:
- Your employer can direct, control, and schedule your efforts
- Your employer provides all the tools that you work with every day
- Your earnings are a set amount and you cannot realize either profits or loss
- You have been trained to perform work in a certain way that is unique to your employer’s systems or operations
- You have a permanent relationship with your employer that exists between jobs and projects
- You are paid on an hourly, weekly, or monthly schedule
A contract stating that you are an independent contractor is not enough to qualify you as a 1099 worker.
Regardless of what has been agreed to, in writing or otherwise, the economic realities of your specific facts and circumstances will determine if you are actually an independent contractor or an employee. Employers are not allowed to use contracts to avoid the laws governing the proper classification of workers. No piece of paper that you were required to sign changes the rules and regulations that determine who is and is not an employee.
If you have been misclassified as an independent contractor, you are likely missing out on important rights and benefits. Employers who deprive you of these protections and privileges do so in order to save money, at a significant cost to you.
What Happens to Workers who Are Misclassified?
If you are misclassified, you may face all of the following issues:
- You may be found ineligible for all worker compensation benefits. Your employer will not pay into worker’s compensation insurance, and you will not be covered if you have an injury on the job.
- You may not be eligible for any workplace rights covered under the FLSA. You will not be entitled to reasonable breaks, overtime pay, or sick pay.
- You may be held responsible for all Social Security and Medicare taxes out of pocket. Full employees have half of these taxes covered by their employers.
- You may be found completely ineligible for unemployment benefits. Your employer will not pay any share into unemployment insurance on your behalf.
- You may be found ineligible to participate in any group health insurance plan that covers employees at your place of work.
These issues can cost you a significant amount of money. As a result of misclassification, you may also owe additional thousands in taxes that would normally not be your responsibility.
Certain types of workers may be more susceptible to misclassification than others.
What Workers Are Commonly Misclassified as Independent Contractors?
Workers in all of the following positions and industries may be subjected to misclassification:
- Anyone working through a staffing agency
- Disaster Recovery and Clean-up
- Energy / Petro Chemical
- Industrial / Manufacturing
- IT / Computer Help Desk
- Financial / Insurance
- Oil/Gas – service companies and operators
- Home Healthcare
- Welders / Inspectors
These workers may be more likely to be targeted because of their participation in seasonal work and limited-time projects. However, these factors do not necessarily make an employee an independent contractor – there are numerous other factors that must be considered. Most importantly, if you are economically dependent on the company and do not direct and control your own work, you may be misclassified.
How Do I Make an Independent Contractors Misclassification Claim?
If you would like to contest your status as an independent contractor (and claim up to double any back overtime wages owed), one of the first things you should do is speak to an Independent Contractor Misclassification Attorney. This is an attorney who is focused on the area of employee classifications. An attorney with experience in this area can help you through the following options:
- Making a statement to your employer: Depending on the circumstances, you may want to alert your employer that you believe that you are misclassified. Even if this doesn’t result in change, you may be able to use the fact that you tried to correct your misclassification as evidence.
- Filing a complaint with the IRS: The IRS is partially responsible for enforcing independent contractor classifications. Making a report may lead them to conduct an investigation on your behalf.
- Filing a suit against your employer: If other options fail, you may need to file a lawsuit against your employer. This can potentially be brought as a class action or a collective action on behalf of all workers who have been unlawfully treated as independent contractors.
An Independent Contractor Misclassification Attorney will also be able to assist and protect you if you face retaliation in the workplace for your attempts to correct your classification.
Is it Time to Speak to an Independent Contractor Misclassification Attorney?
If you are improperly classified, it can cost you a significant amount of overtime pay and benefits that you should have earned. You may have been left ineligible for tax assistance, health plans, and worker’s compensation protection.
Seek justice by scheduling a consultation with an Independent Contractor Misclassification Attorney today.