Who Really Benefits From Independent Contractor Status?
Has your company refused to pay you overtime or meet minimum wage requirements, or denied you benefits and workers comp protection based on the claim that you are not an employee, but a contractor? The loophole of Independent contractor is used regularly for companies to have many people working for them without having to pay proper payroll taxes, benefits, insurance and the like. This is not a catch-all where the company can place everyone. It is actually defined by the law who is and is not to be considered a contractor, but still some employers, either knowingly or not, will label workers as such to avoid any or all of the following:
- CA and Federal payroll taxes
- Meeting minimum wage and/or overtime requirements
- Providing proper paid and unpaid rest or break periods
- Covering your expenses while doing business for them
- Paying for your workers compensation coverage
- Covering unemployment, disability or Social Security taxes and payments.
The biggest catch here is the fact that if you are labeled an independent contractor your company is not required to adhere to a number of California labor laws as they pertain to wages or hours worked. It’s easy to see why this is a common tool for companies looking to cut costs on their workforce, but a true independent contractor is actually defined by their job and duties, not the whim of the employer as to whether or not they wish to pay you as an employee. While there is no exact legal definition of “independent contractor,” the Division of Labor Standards Enforcement (DLSE) has guidelines they will use to test the situation. You are always presumed to be an employee first, and the employer must prove you otherwise. Some of the criteria that may be used to classify you as a contractor could be:
- The work you do for your employer is clearly different from the line of business they are in, i.e., you do all the website work for a company that builds houses.
- The job you perform is NOT a part of the regular business i.e., you are a market consultant for a company selling a product.
- You provide a service which would be considered a specialized skill.
- You were not given a permanent position but clearly hired to do a specific job just until completion.
- You work with no supervision or oversight, but rather are given a desired result and it is entirely up to you to fulfill this in your way.
Does this sound like your job? If not, and if you are working with close oversight and performing a function that would be considered part of the normal running of the business you work for, but your employer is still calling you an independent contractor, you are likely being labeled as such to save them money! It is not legal to claim contractor status on those who should be employees and leave them without protection and important benefits. If your employer has convinced you that contractor status is better for you as you can then use all of your “write-offs” come tax time, ask yourself, is my boss really going to do what’s best for me, or himself?
Don’t get left in the cold holding the bill. If you have been mislabeled as a contractor, you are likely owed money in wages and business expenses, not to mention penalties and interest on the back wages which can go back as many as four years. United Employees Law Group is here to help. Call TODAY for your FREE review. Don’t let another tax year come and go while you’re left holding the bag!
Photo Credit: Shutterstock/SpeedKingz