Employee Status v. Independent Contractor Status

Not all people who perform work for a company are considered “employees.” Instead, they may be classified as independent contractors. However, just because an employer classifies a person as an “independent contractor” does not necessarily mean the person is actually an “independent contractor” according to the applicable law. Whether a person is an employee or independent contractor usually depends on the kind of work the worker performs and how the employer supervises that work. Employers sometimes mislabel workers as independent contractors when they are actually employees to avoid having to pay payroll taxes and collect wages withholdings. Employers are also not liable for payments under workers’ compensation, unemployment insurance, disability insurance, or social security for their independent contractors.

Benefits of Being Considered and Employee
Employees are protected by state wage and hour laws (e.g., minimum wage, meal break periods), workers’ compensation, unemployment insurance, disability insurance, and social security. Employees can also seek assistance from state agencies to enforce the rights provided by these laws. For example, if an employer pays less than minimum wage, an employee can file a claim with the Labor Commissioner. Independent contractors, on the other hand, are not protected by wage and hour laws, workers’ compensation, unemployment insurance, disability insurance, or social security. Also, independent contractors are unable to turn to most state agencies for assistance, but instead have to go to court to settle contract pay disputes or enforce other rights. The Kletter Law Firm can help you ascertain your status as an employee or Independent Contractor, and can assist you in proceeding with any claims you have.

Determining the Correct Status
There are a number of factors to determine if a worker is an independent contractor or an employee. All the factors are considered together in making the determination. Your employer may be misclassifying you as an independent contractor if:

• your employer can fire you, or you can quit, without good cause and without notice;
• your employer exercises complete control over the way in which a worker completes a job (how, when, and where they do the work);
• you generally work under extensive supervision;
• you are trained by the employer to do a job in a certain way and may work with experienced employees to learn the job, or attend courses or meetings;
• your work is part of the day-to-day operation of the business and your work is coordinated with that of other people in the business, and the success of the business depends upon that work being done; for example, a secretary is probably an employee because his work is coordinated with one or several bosses and other secretaries, while a plumber hired by a restaurant to fix the bathroom is probably an independent contractor because during and after that task, he will have little or no interaction with any of the other employees (waitresses, cooks, etc.);
• you have to do the work assigned to you, and cannot hire assistants to perform the work you contract with the employer to do;
• you work for the employer year after year instead of finishing a job when the contract ends;
• your hours are set by the employer or you work full time instead of finishing a job when the contract ends;
• you have to work at the employer’s office, or at another site designated by the employer;
• your employer sets the order in which you must do certain tasks, particularly if the same results could be achieved by doing the tasks in a different order;
• you are paid on set dates in regular amounts;
• your employer provides tools and materials needed to complete work;
• you usually only work for one employer instead of several firms at the same time;
• your services are generally available only to your employer and not to the general public;
• you believe you are an employee;
• you are part of the employer’s business and do not offer your services separately from the employer; and
• you perform tasks that do not require extensive skill or expertise.

If your employer has been treating you as an independent contractor and you are actually an employee, you may be entitled to recover bank wages, collect unemployment insurance, have social security withheld, and also recover interest, penalties, attorneys’ fees and costs.

It can be difficult to determine whether someone is an employee or an independent contractor and this is typically determined by the ultimate finder of fact, the jury, because it is a question of fact, not law. If you feel that you have been misclassified as an independent contractor, contact Kletter Law Firm today by calling 415.434.3400 or you can schedule a no-fee in person consultation. We can help you in determining your status and in processing your claims. In the meantime, keep detailed records of the type and hours of work you performed. It might be helpful for you to keep a journal of the hours you work, the tasks you perform every day, and how you are supervised while doing that work.