Employee misclassification is a problematic occurrence that companies and businesses involve themselves in. They may purposely misclassify employees to get around tax payments and other regulations. Some workers are not aware of these tactics and may end up being paid less or mistreated at the jobs; they may not even know what they are legally entitled to. It is important that employees fight back and seek appropriate classification if they are not getting the wages and coverage they deserve. However, it is difficult for workers to do this due to fearing the loss of income and inability to provide for themselves and their family. If you have been misclassified, it is wise to contact an employment attorney who can examine your case and help you move forward with legal action. Our expert misclassification attorneys at the California Labor Law Employment Attorneys Group will gladly take on your claim and protect your rights.
Employee Misclassification: Are You a Victim?
To determine if you are a victim of employee misclassification, you must first determine if you are an independent contractor a full-time W-2 employee. Individuals who are victims of employee misclassification may find themselves with unfair expectations, mistreatment, micromanaging, and a loss of control over their time and materials. Employees are generally privy to the rules and regulations of the company, but independent contractors are not.
Victims of misclassification can end up with a large loss of income and no insurance coverage, which may cause them to rack up expenses and debts. For instance, your company may misclassify you as an independent contractor so it doesn’t have to pay your health insurance. If you get sick or need emergency treatment, you would have to pay for the treatment out of pocket, which can be thousands of dollars.
Are You Misclassified as an Independent Contractor?
You may be misclassified as an independent contractor if you are given 1099 forms or if you are denied certain medical coverage and health insurance. You may not receive benefits or be able to receive worker’s compensation payment in the event you hurt yourself at work. You may not be entitled to workplace rights like meal breaks, overtime, and minimum wage earnings.
Truck drivers, for example, may be misclassified as independent contractors because they generally use their own routes to get places. However, they may be using company vehicles, have sick time, and are prevented from driving more than 12 hours in a day. Independent contractors can drive as much as they want and would use their own vehicles.
What is the Difference between an Independent Contractor and an Employee?
The difference between an independent contractor and an employee can boil down to contracts and nature of work. Independent contractors are generally promised a set amount of pay for a specific task (such as roofers who lay shingles and are paid a total of $800 for the job), and they retain complete control over the way the task is completed.
California generally has a three-point determination system to see if a worker is a contractor. The points are as follows:
- The worker is free from the directions, control, and mandated rules of the employer or client
- The worker performs tasks or completes a job that is not in the normal course of work of the client’s business
- The worker is often engaged in his own trade, business, service, business, or occupation that is the same nature or style of the work he is performing
Therefore, contractors may be thought of as separate entities from a business. If a business is an automotive distributor, it will likely not employ individuals who keep the plumbing clear and who install new pipes – these individuals are independent contractors. These individuals also likely run plumbing businesses, engage in these tasks with other clients, and more, thus solidifying them as independent contractors.
What are the Rights of an Independent Contractor?
Independent contractors have specific rights that differ slightly from employees’ rights. Some examples include:
- Right to a Contract: Contractors have the right to pursue agreements and have clients sign contracts that include the parameters for the job, the payment, the expectations, and method of payment.
- Right to Payment: You may not earn the same as an employee and you can charge fees for what you wish, but it is still your right to be paid for your work, especially if you have a written agreement with your client.
- Right to Work Considerations: You have the right (and this is the key point of independent contractor law) to determine how you complete a job and the method you will use.
- Right to Legal Action: In the event a contract is breached, payment is not handed out, or you walk out on a job because a client oversteps his legal reach, you have the right to pursue appropriate legal recourse.
Reimbursement of Expenses for Independent Contractors
Clients can reimburse independent contractors for various business expenses, including meals, entertainment, travel, and more. These reimbursements are not considered income and are listed as expenses on tax forms.
An independent contractor can be reimbursed if he provides adequate and accurate accounting of the expenses. In the event the contractor does not substantially keep records of the expenses, he may not be able to receive any reimbursement at all.
Is it legal for an employer to give me a 1099?
A 1099 tax form is what independent contractors use to file their taxes. There is no such classification as a “1099 employee.” Employees are, by definition, owed W-2 forms, while independent contractors receive 1099 forms. If your boss gives you a 1099 form to complete, you are likely being misclassified. The action is illegal.
I was hired as an employee then switched to an independent contractor. What are my rights?
My position was changed from an employee to an independent contractor. What are my rights? Can I refuse? Can I file a lawsuit?
Our clients often come to us with concerns like these. If you have been switched to an independent contractor against your will or without your knowledge, you can reasonably sue for lost wages and fight to be given the proper classification.
What is the Difference between Exempt and Non-Exempt Employees?
Victims of misclassification in exemption status generally find themselves suffering lost income. Exempt employees are not entitled to overtime pay, must receive a salary instead of hourly pay, and must perform executive, administrative, or professional duties.
- Executive duties are generally completed by managers who manage 2 or more employees; managers have the ability to hire or fire workers or cause workers’ employment statuses to change
- Administrative duties are characterized by non-manual work related to management, operations, or customers, and must utilize independent judgment and discretion
- Professional duties involve specialized knowledge in an advanced field, such as surgeons, professors, and engineers
Other exemptions include those who receive high compensation (more than $107,000 per year), IT or computer workers (programmers and software engineers), and those who have a duty of making sales outside of the primary place of employment (insurance salesmen and door to door sellers). All exemptions must meet the other criteria.
Non-exempt employees, on the other hand, are paid a minimum wage and are paid hourly. They must be paid overtime for hours worked beyond 8 hours in a day or 40 hours in a week. Also, non-exempt workers must be given various meal breaks and rest breaks.
What can I win if I sue for employee misclassification?
You could potentially receive a fair amount of compensation if you sue for misclassification. While you were misclassified, you may have been denied various wages and reimbursements. You could have been fired for missing a work due to an injury, denied payment for an additional week of overtime, or denied health care coverage despite your employer having dozens of employees and you fitting the criteria.
We will make sure you are given:
- Wage reimbursement
- Reinstatement of your position
- Proper classification
- Worker’s compensation
- Damages under the FMLA
- Pain and suffering damages
Our goal is to ensure that workers are treated fairly and that businesses adhere to the law. We will stop at nothing to make businesses comply with the necessary classification laws and to not use independent contractors as scapegoats.
How long do I have to sue my employer for misclassification?
If you intend to file a lawsuit against your employer because you missed income and wages, you have 3 years from the date of the most recent violation. However, contract breaches add an additional year, so your statute of limitations would instead be 4 years from the violation.
If you fail to sue within that time period, you will not be entitled to your lost income. Many individuals are not aware that there is a statute of limitations and do not sue in time, resulting in no payment. We will represent you and ensure that your case is submitted on time with all the proper evidence.
What do I need to sue my employer for misclassification?
Some evidence you should collect to sue your employer for misclassification includes:
- Pay stubs
- Bank statements
- Messages and emails describing overtime and additional work
- Tax forms
- Copy of your employee handbook
- Eyewitness statements, coworker reports, manager claims, and more
The Best Firm in Town
The California Labor Law Employment Attorneys Group is committed to workers and employees who have been mistreated and misclassified by their companies. We will ensure that you are given the right restitution for your losses, and we will work to bring about a positive change in your company’s ethics and tactics. If we have to go to court, we are willing to represent you in front of a judge and jury.
For a free legal consultation on your claim, contact our law firm. We will walk you through the legal process and explain your rights. We’ll also give you our zero fee guarantee, a promise that you pay no fees for our services. We get paid only if we in and the money comes from the settlement from your company. If we lose, we receive nothing.
To get started on your employee misclassification claim, contact the California Labor Law Employment Attorneys Group.