Independent Contractor Misclassification Lawyer – Many companies try to sidestep California’s law by hiring “independent contractors” instead of employees. If classified according to the law, independent contractors are not “employees” covered by the wage and hour laws, and companies don’t have to pay them overtime. However companies are not allowed to do this if the “independent contractor” in fact qualifies as an “employee” under California’s Economic Realities Test. This would be a type of misclassification.
Your attorney can tell you if you should be an employee or an independent contractor.
This test looks to see whether the worker is dependent on the company to which they render their services. In determining whether workers qualify as employees under the Fair Labor Standards Act, courts look at a number of factors, including:
- the degree to which the employer has the right to control how the work is performed,
- the degree to which the worker’s opportunity for profit or loss depends upon the worker’s managerial skill,
- the worker’s personal investment in equipment, labor, or materials required for the job,
- whether the service at issue requires a special skill,
- the degree of permanence of the working relationship; and
- whether the service rendered is an integral part of the employer’s business.
Independent Contractor Lawyers
The importance of and weight to be given each factor depend on the totality of the circumstances; however, the right to control the means and manner of job performance is generally the most important consideration.
On the other hand, if the worker is classified appropriately as an independent contractor, he or she is not a “employee” under California law, and are therefore not entitled to overtime.
Sadly, abuse of this system is rampant. According to one study, tax audits done by the Economic Development Department from 2006 to 2008 show that 29% of audited employers misclassify workers as independent contractors when they should be employees.(1)
Footnote #1: National Employment Law Project (October 2011) Independent Contractor Misclassification Imposes Huge Costs on Workers and Federal and State Treasuries, p. 4, 5, fn. 5.
If you believe that you have been improperly misclassified as an independent contractor, and believe you are owed wages, contact us today. While our office is located in Orange County, we serve clients throughout California.