Classifying employees as independent contractors is a frequent, and illegal, tactic used by employers to save money and consequently steal from your paycheck. As an employee, you are afforded rights that 1099 employees would not otherwise be privy to. The distinction between the two is not up to the digression of the employer. There are legal determinations that must be made in order to classify someone as an independent contractor. If you believe your employment has been misclassified, there are warning signs you should look out for and steps you should be taking to determine if you should be suing for your employment rights.
As an independent contractor, your relationship with a company will be very different than that of an employee. According to the IRS, there are 3 broad determining factors that are used to determine an employee roll in a company:
- Behavioral: the company has a right to control the way the work is done including training for the position, control over how the job is performed, etc.
- Financial: the company has a financial stake in a position including compensation for equipment, advertising budgets, etc.
- Type of Relationship: the company provides written contracts for employee benefits including vacation time, insurance, pension plan, etc.
The way an employer handles these three factors in the relationship can greatly determine whether they are legally able to classify you as an independent contractor versus an employee. The Courts and Department of Labor also enforce the Economic Realities Test to determine the difference, and many other agencies have their own similar determining systems.
As an employee, you are entitled to certain rights by either your employer or the state. If you are being misclassified as an independent contractor, you could be missing out on the rights that are granted to you resulting in unfair compensation for the job you are providing. These rights often include:
- Minimum wage
- Overtime compensation
- Job-related reimbursement
- Health insurance coverage
- Social security and Medicare payments
What to do Next
Your rights as an employee should always be protected, and if you believe you have been misclassified, you could be facing a severe financial loss at the hands of your employer. The attorneys at Gokal Law Group Inc. have the experience and knowledge needed to look at your case and determine if you have reason to file against your employer. Learn more about your California employee rights.