Is Your Employer Misclassifying Your Employment Status?

Employee misclassification is when an employer labels its workers inaccurately. Employers often misclassify employees as independent contractors to avoid business costs and taxes. Further, independent contractors do not have the same legal protections and benefits that employees receive regarding overtime, meal breaks and rest breaks.

It does not matter if it is done on purpose, or whether it is done accidentally — both violate California law. Moon Law Group, PC., is an employment law firm that fights for the rights of misclassified workers. Our team can help protect your rights, obtain the benefits that you deserve per your employment status and recover compensation, including unpaid wages.

Are You Misclassified As An Independent Contractor?

Many employers require that the worker sign an “independent contractor agreement” whereby the worker agrees that he/she is an independent contractor. However, a worker cannot simply agree to be an independent contractor through a contract. Many factors determine whether a worker is an employee or an independent contractor. If your employer classifies you as a contractor when you are performing the duties of an employee, you may have a legal claim.

If You Are A Nonexempt Employee, You Deserve Benefits

California classifies employees as exempt or nonexempt. Employers owe nonexempt employees benefits such as:

• Overtime pay
• Double-time pay
• Meal breaks
• Rest breaks
• “Waiting time penalties” (failing to pay employee all wages owed at termination)
• Itemized pay stubs (wage statements)

Employers can save hundreds of thousands of dollars a year by classifying workers as exempt when they are in fact nonexempt. Your employer may misclassify you to save money by scrimping on the benefits you deserve. This is against the law, and it can result in serious penalties.

What Is the Difference Between An Independent Contractor And An Employee?

An employee is a worker who is economically dependent on an employer and works under that employer’s control. They are entitled to protections under the Fair Labor Standards Act (FLSA), including minimum wage, overtime pay and other rights like paid leave.

By contrast, an independent contractor is a worker who operates their business and is not economically dependent on one employer. They control how and when work is done and are not covered by FLSA protections.

The U.S. Department of Labor (DOL) evaluates worker classification based on the “economic reality” test. This involves considering the totality of the circumstances, using six core factors:

• Opportunity for profit or loss depending on managerial skill: If the worker can affect their earnings through decisions such as hiring help, purchasing equipment or negotiating contracts, this points toward independent contractor status.
• Investments by the worker and the employer: Significant investments by the worker in tools, equipment or business expenses may indicate they are in business for themselves.
• Degree of permanence of the work relationship: An indefinite or continuous relationship suggests employee status. A temporary or project-based arrangement supports independent contractor classification.
• Nature and degree of control: If the employer sets the worker’s schedule, supervises performance or controls how tasks are completed, the worker is more likely an employee.
• The extent to which the work performed is integral to the business: Work that is essential to the employer’s core operations points to employee status. Nonintegral or supplemental work may suggest an independent contractor role.
• Skill and initiative: Specialized skills and business initiative favor independent contractor status. If the worker relies on training from the employer, they are most likely considered an employee.

No single factor decides classification. Instead, the DOL weighs all factors equally to determine the true nature of the work relationship. Misclassifying a worker can result in back wages, penalties and legal consequences for the employer.

If you believe you have been misclassified, our attorneys can help you pursue a claim under California laws, empowering you to recover all you truly deserve.

Learn Whether You Are Misclassified. Get A Free Consultation.

To learn whether your employer has misclassified you and is withholding the pay or benefits that you deserve, contact Moon Law Group, PC. We offer free consultations in which we will discuss your case. To get your consultation, call 213-232-3128 or send our firm an email.