Why Did Your Employer Misclassify You as an Independent Contractor?

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Are you an employee or an independent contractor? Does it really matter what you are called as long as you are getting paid for your work?

Even though you might not have given much thought about it, there are huge differences between being classified as an employee versus an independent contractor. Most notably, as an employee, you gain access to a variety of benefits through state and federal labor laws. For example, as an employee, you may be eligible for meal breaks, medical benefits, and overtime, depending on the details of your occupation.

In an effort to work around these laws, some companies intentionally misclassify their workers as independent contractors, who generally do not get nearly as many work benefits as employees. Importantly, the federal Fair Labor Standards Act (FLSA), provides minimum wage and overtime protections to employees. By knowingly misclassifying an employee as an independent contractor, a company could stand to save thousands, if not millions, each year by minimizing the cost of employment upkeep by denying you benefits and protections to which you are entitled.

Are You Being Misclassified?

To determine whether you are an independent contractor or employee under the FLSA, courts look to the “economic realities” of the relationship between the company and worker in order to determine employee status. Some factors to consider are 1) the permanency of the relationship, 2) the contractor’s investment in equipment and tools, 3) the degree of control by the company, and 4) the worker’s opportunity for profit or loss, among other things. It is important to note that even if you are an “independent contractor” under another law (tax law or state law), you may still be an employee under the FLSA and eligible for minimum wage and/or overtime compensation.

An example of an independent contractor is a plumber who is hired on a job-to-job basis. A home repair company contracts the plumber to fix a sink in a customer’s home. The plumber owns his own tools and operates his own plumbing company. How the fix is completed is up to the plumber, with the only factor being important to the company is that the sink is fixed somehow. After the job is completed, the plumber is paid for the job performed and does not receive an hourly wage or salary. In this example, the plumber is likely an independent contractor. If the company tells the plumber to wear a certain outfit, use certain tools, and perform a certain type of fix, though, then the plumber may be considered an employee.

This brings us back to the question: Are you being misclassified? Are you expected to work regular hours, perform duties to exact instructions, dress according to company standards, or fill out reports a certain way? If you answered ‘yes’, then you may be an employee, even if the company paying you says you are an independent contractor.

At Donati Law, PLLC in Memphis, we stand up for the rights of mistreated and misclassified employees in all walks of life. With more than 150 years of collective legal experience, our employment law attorneys are ready and willing to see how we can help you get the fair treatment, wages, and benefits from your employer as you deserve. Call (901) 209-5500 now.

Every Client is a Cause We Believe In

To discuss your case with an accomplished attorney who cares, give our firm a call at (901) 209-5500 or fill out the form below.

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