There are some clear advantages to working as an independent contractor but, there are also some drawbacks. In some cases, companies attempt to classify employees as contractors in order to save money. A company who uses independent contractors saves money on payroll taxes, benefits and most importantly overtime. Those who feel they are being misclassified as a contractor should take the time to meet with an employment law attorney to review their job duties as well as the amount of control a company has over their performance to determine if they are being misclassified. The laws have recently changed making it much more difficult for businesses to classify employees as an independent contractors. If you have been misclassified you might be able to get benefits, and up to four years back pay along with penalties. Consult with Attorney Lynch today.
Rules governing contractors
When a company hires a person to do a specific task such as build a website, they may elect to hire an independent contractor. The reasoning is fairly simple: A company does not need a full-time employee that will complete only one task and have no other responsibilities. Keep in mind, there are other factors that impact a company’s decision to not hire a person as an employee versus a contractor including:
- Financial reasons – a company that uses independent contractors need not pay minimum wage, overtime pay or offer insurance to contractors.
- Termination – contractors are not protected by the same laws that protect employees. As an example, actual independent contractors do not qualify for unemployment benefits at the end of the employment contract. However, employees, even those misclassified as contract employees, may be entitled to received unemployment benefits at the end of their employment.
When businesses misclassify
In some cases a business may legitimately misclassify a worker as an independent contractor simply because they do not understand the laws. In other cases, this misclassification is deliberate and planned. There are over four tests covering some twenty-four factors to consider when designating a person as employee or a contractor and may include:
- Is the work assigned, reviewed, or supervised? If so, you most likely were not an independent contractor.
- Can the individual be fired? If you were fired, you most likely were not an independent contractor.
- Can you subcontract out the work? If not, you most likely were not an independent contractor.
- Did you receive training, work evaluations, tools and materials, hourly payment? Are your hours set? Do you work full time? Do you work at employers site?
Review these and other factors with Attorney Michael Lynch today. It is important to keep in mind that not all businesses misclassify employees as contractors. However, if you are uncertain if your status is being recorded correctly, contact LynchLaw. Attorney Michael Lynch is very familiar with employment law and can evaluate your individual circumstances and help determine if you are being misclassified as a contractor.