Some working people prefer the flexibility that comes with being an independent contractor. Many more people, however, prefer the stability that comes with being an employee. Sometimes employers wrongly classify employees as independent contractors. This practice is known as misclassification. Misclassification violates the federal Fair Labor Standards Act (FLSA) and many state laws as well. More importantly, misclassification exploits working people.
The U.S. Department of Labor has highlighted the many problems with misclassification, including:
- Independent contractors aren’t eligible for overtime pay.
- Businesses may not have to pay independent contractors minimum wage, depending on their arrangement.
- Independent contractors aren’t eligible for unemployment benefits, workers’ compensation insurance and other benefits.
- Independent contractors do not have the same rights that an employee has when bringing a discrimination or retaliation claim.
Considering the benefits that are available to employees, it is not surprising that unscrupulous employers sometimes attempt to misclassify employees as independent contractors. With this said, the line between an employee and independent contractor is not always clear-cut.
How do we tell if someone is an employee or an independent contractor?
The United States Supreme Court has held that no one factor will decide whether a person is an employee or independent contractor. Instead, courts will look at many factors. Some of these factors include:
- Does the person perform an essential role in the business or a separate job?
- Does the person manage or supervise other people?
- Who controls the person’s work schedule and pay?
- Does the person work for other companies in addition to this company?
- How long has the person worked for the company?
In general, the more independence a worker has in terms of his or her pay rate; schedule and responsibilities, the more likely he or she will be classified as an independent contractor.
While misclassification often occurs in lower-paying industries such as food service, hospitality, and custodial industries, it can happen in many different fields. If you are an independent contractor but believe you should be classified as an employee, an experienced employment lawyer can help you understand your rights and take action. For years, the employment attorneys of Thatcher Law Firm have helped employees across Maryland, Washington D.C. and beyond vindicate their rights.