In recent years, the number of misclassified workers has increased tremendously. In fact, a study found that over 700,000 workers were misclassified over a three year period in New York State alone. Misclassification affects workers in many industries – trucking, entertainment, graphic, video production, computer consultants, etc. You are not considered an “independent contractor” under the law just because the business you work for says you are, because you signed an independent contractor agreement or because you are issued an 1099 tax form. Some businesses will misclassify workers in an effort to (i) avoid providing employee benefits (including health insurance, vacation pay, stock options), (ii) avoid making contributions to payroll taxes and incurring liability for unemployment insurance benefits; and (iii) try and escape statutory protections afforded to employees including some anti-discrimination laws and minimum wage and overtime pay. If you believe you or someone you know has been misclassified in the workplace, contact our Award Winning Employment Lawyer at (800) 893-9645 to learn your rights and options on a confidential basis.
Determining if a worker is an employee or an independent contractor can vary by state and the jurisdiction. For example, the IRS and Department of Labor (State of Federal) may have differing standards. For example, the Fair Labor Standards Act, the federal law covering overtime pay and enforced, in part, by the US Department of Labor, defines “employ” as including to “suffer or permit to work.” In general, while there is not a single factor that definitively determines a worker’s proper legal classification, there are several guidelines the courts and administrative agencies use to determine if a worker should be treated as an independent contractor. Generally speaking, an independent contractor (i) is free from the company’s direct supervision; and (ii) does not receive directions and control while performing work functions. The following facts could fall in favor of a finding that a worker might be an independent contractor is if he or she owns his or her own business. The worker may advertise in print or digital media to promote his or her business services. The person – the worker has his or her own business cards, determines his or her own schedule, invests in his or her own supplies and equipment, he or she provides services to other companies that are your competitors. The determination of an independent contractor status is fact specific and can vary by situation. Because a company’s intent is not a factor in certain violations, an innocent and well intentioned business may still be penalized and subject to exposure. It is in the worker’s benefit and the company’s benefit to best understand the proper legal relationship. Remember that a signed agreement will not be controlling — the actual factors of the working relationship will determine the correct status. The issue may be raised if the working relationship is terminated and you want to file for unemployment insurance benefits — your eligibility will depend on your employment relationship and could be the subject of a Department of Labor inquiry.
Contact our New York and Westchester Employment Lawyer at (800) 893-9645 to discuss your specific case.
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