Many employees in California are intentionally or mistakenly classified as independent contractors, even if they meet the requirements for an employee classification under state laws. Due to the misclassification, employees are denied benefits they rightfully deserve, like meal and rest breaks, overtime pay, and business expense reimbursement.
Sadly, a lot of these cases are intentional, as it saves the employer money when they don’t have to provide these benefits to their workers. The truth is, employee misclassification imposes tremendous costs on workers, as well as local and state treasuries that lose out on tax revenue, according to the National Employment Law Project.
Workers who are misclassified as independent contractors include delivery drivers, janitors, truck drivers, and home health aides. No matter what you do for a living, misclassification is against the law, and you can take action against your employer for the wages and work benefits that were denied to you. For more information on filing a lawsuit for misclassification as an independent contractor, schedule a free consultation by contacting our office.
How Do I Know if I have been Misclassified as an Independent Contractor?
The U.S. Department of Labor’s Wage and Hour Division has a worksheet that you can refer to if you trying to determine whether you are correctly classified by your employer. We encourage you to look over this information and learn about your rights under the Fair Labor Standards Act (FLSA). For now, here are the basic factors that are used to classify a worker as an employee versus an independent contractor:
- The degree to which the worker’s duties are an integral part of the business / company
- If the worker’s opportunity for profit and loss is affected by their managerial skills
- The worker’s skills and initiative within the job environment
- The investments in equipment / facilities by the employer and the worker
- The permanency of the relationship between the worker and the employer
- The extent to which the worker and the way they perform the job is controlled by the employer
Employee Classification Under California Law
It’s important to note that California’s labor laws tend to favor the employee over the employer. This is reflected in California’s Labor Code Section 2750.3, which was enacted by the State Legislature in 2019.
According to this statute, a worker is considered an employee and not an independent contractor when cualquier of the following conditions are true:
- The employee is not free from the direction and control of the employer
- The work duties are performed within the normal course of the employer’s business
- The workers is not normally engaged in an independently established occupation, trade, or business that is the same nature of the work performed for the employer
Misconceptions Regarding Independent Contractors Versus Employees
Frankly, the difference between worker classifications is a complicated subject, and it’s understandable why there is so much confusion over this issue. A common misconception has to do with 1099s, i.e., you are an independent contractor if your wages are reported on a 1099 and not a W2. This is not necessarily true, and you may still be entitled to employee benefits like overtime, business expense reimbursement, and uninterrupted meal breaks.
In addition, if does not matter if you signed a contract agreeing to be an independent contractor. If you later find out that you are misclassified, you have the right to demand that your classification is corrected, without fear of being fired and other types of retaliation. If you are fire from your job, you may have grounds to file a wrongful termination lawsuit.
What can I Recover if I Sue for Misclassification by my Employer?
In this section, we will talk about the legal remedies that are available to those who are misclassified by their employer as independent contractors. The compensation you are entitled is detailed in California Labor Code Section 226.8. Under this law, employers who wrongfully classify a worker as an independent contractor may be penalized for amounts ranging from $5,000 to $15,000 per violation of the statute. Alternatively, they may be fined anywhere from $10,000 to $25,000 for each violation if it’s found that the employer was engaging in a “pattern of practice” of misclassifying employees.
Under the California Private Attorney General Act (PAGA), employees that are misclassified have the right to file a claim and collect these payments on behalf of the state. If the legal action against the employer is successful, the employee gets to keep 25% of the collected penalties.
Aside from these payments, you can also recover the cost of job-related expenses under the provisions of Labor Code Section 2802. Expenses that can be recovered include the cost of tools, office equipment, fuel, and other expenses that your employer made you cover by classifying you as an independent contractor.
Finally, employees who are misclassified as independent contractors are entitled to the value of overtime and minimum wage compensation under 29 U.S.C. Section 201of the Fair Labor Standards Act and California’s Labor Code Section 510.
Assert Your Rights with Help from an Employment Lawyer
Employees who are robbed of the wages and benefits they are legally entitled to have a variety of legal actions that are available to them under federal and state laws. But taking advantage of the laws and holding your employer accountable is easier said than done. Our law firm will help you navigate the legal system and secure the compensation you missed out on because you were misclassified as an independent contractor.
If you choose us to be your legal representative, we promise that you will never pay upfront for the cost of legal services. Our expenses are recovered as a percentage of your settlement award, so winning your case is the only way we get paid. That’s our promise to you under the Zero Fee Guarantee, which you can learn about during a free case evaluation.
We are here for you day and night, so contact us anytime if you have questions or concerns about employee misclassification by a California employer.
