Benefits for Employees Mislabeled as Independent Contractors
Independent contractors are not employees
The IRS lays out clear guidelines as to whether or not a worker is an independent contractor or an employee. At first glance, this type of classification may seem irrelevant. However, some companies are purposefully misclassifying regular employees as independent contractors in an attempt to prevent providing those workers with fair compensation and employee benefits.
Employees typically receive benefits such as vacation pay, sick pay, medical and dental insurance, and reimbursement for mileage and other costs incurred that pertains to the job. However, employers usually do not provide these benefits to independent contractors. Instead of these benefits, independent contractors are given more freedom to do their jobs as they please.
Workers who are incorrectly and illegally classified as independent contractors but are actually employees may be entitled to the benefits and compensation that they would have received had they been classified correctly, plus damages. According to the IRS, employment status is determinable through three categories: behavioral control, financial control, and the business relationship.
Behavioral Control
- Types of Instructions - Employees are told...
- When and where to work
- What tools to use
- Which other workers should be hired
- Where supplies are purchased and serviced
- Who should do specific work
- How to do the work
- Extent of Instruction - Employees are provided detailed instructions
- The more detailed the instructions, the more likely the worker is an employee
- Evaluation of Work
- Employees are evaluated on how the work is performed and the finished product
- Independent contractors are only evaluated on the finished product
- Training Programs - If detailed training is provided to a worker, that worker is an employee.
- Ongoing and recurring training strengthens an employee claim
Financial Control
True independent contractors...
- Often invest their own money in the equipment used while working for another person, including tools and other equipment
- Are less likely to be reimbursed for costs incurred while working for another person
- Have the risk of losing money on any contracted job
- Are generally allowed to work for more than one company at the same time, as well as advertise their services
- Are sometimes paid in one flat fee for the work performed
Business Relationship
- A contract stating a worker is an independent contractor is not proof that a worker is properly classified
- If a worker is hired indefinitely, without a specific project or timetable in mind, the worker is likely an employee
- If an employer presents a worker's results as its own, the worker is likely an employee.
If you or a loved one has been improperly classified as an independent contractor when all signs point to improper classification, contact the experienced employment law attorneys of Perona, Langer, Beck, Serbin and Mendoza. Our law firm has the legal talent and resources to ensure that irresponsible employers are held accountable and that you receive the compensation and benefits you deserve. Send us an email using our submission form or call us at (800) 435-7542 to schedule a free, confidential consultation. Rest assured that employer retaliation is against the law, and Perona, Langer, Beck, Serbin and Mendoza will vigorously pursue any violators.
