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Independent Contractors

Employers often choose to classify workers as “independent contractors” because that classification provides major benefits for businesses. An employer is not legally required to provide independent contractors with benefits including overtime, meal breaks, medical insurance, and they do not have to carry workers compensation coverage for them.

Independent Contractors

Many companies misclassify employees as independent contractors to avoid providing them with higher compensation and/or employee benefits. Employers are tempted to erroneously label employees independent contractors to avoid paying state and federal taxes and benefits to that employee. If you have been misclassified as an independent contractor instead of an employee, we can help you receive back wages and benefits.

Employees incorrectly and illegally classified as independent contractors may be entitled to the benefits and compensation that they would have received if they had been classified correctly, plus damages.

Am I Really an Independent Contractor?

Individuals who are economically dependent on their employer are typically not independent contractors. Economic dependence takes into consideration the degree to which the so-called independent contractor is dependent on the employer to earn a living. This analysis evaluates:

  • Whether the worker has the ability or right to perform similar work on his own without the employer.

    • Does the employer have a non-compete agreement?

    • Does the employer limit the contractors ability to solicit business from the employer’s client?

    • Is the nature of the job something that the individual is capable of performing without the employer?

  • A comparison of the nature and amount of the worker’s investment in tools, equipment, and administrative vs. the employers investment.

  • The extent to which the contractors opportunity for profit is dependent on the employer providing him with business opportunities.

  • Does the contractor provide services which are integral to the companies’ business? In other words, could the employer exist if the contractor wasn’t providing services.

  • Who controls the right to work?

  • Does the contractor have the right or ability to negotiate their rate of pay, when they work, who they work for or how they perform their job?

  • How frequently does the contractor perform work for the employer or the employer’s clients? Is the work performed regularly or for short, sporadic periods of time?

  • Does the employer utilize both contractors and employees to perform the same job functions?

  • Does the contractor wear the employer’s uniform or hold himself out as an employee of the employer?

  • Did you work as an employee and were asked to become an independent contractor?

According to a recent DOL press release:

“The misclassification of employees as something other than employees, such as independent contractors, presents a serious problem for affected employees, employers and to the economy. Misclassified employees are often denied access to critical benefits and protections, such as family and medical leave, overtime, minimum wage and unemployment insurance, to which they are entitled. Employee misclassification also generates substantial losses to the Treasury and the Social Security and Medicare funds, as well as to state unemployment insurance and workers’ compensation funds.”

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