A tactic that some employers use to cut costs is to misclassify an employee as “exempt” to not paid for overtime. It is most important to remember that as an employee, you are protected by the Fair Labor Standards Act (FLSA) when it comes to whether or not you are entitled to overtime pay.
The most common type of misclassification is labeling an employee as an independent contractor. Independent contractors typically are exempt from overtime pay. They are paid by 1099 forms or in cash, but an employee’s title does not determine their correct status. In California there are clear laws that protect employees mislabeled as independent contractors. A labor law attorney is knowledgeable about the laws that apply and can help to determine the correct classification under the law.
An employee’s title, the way they are paid, and written contracts or agreements do not always prove that the employee is an independent contractor under the law. The circumstances of employment are analyzed, as a whole, to decide whether or not employment has been misclassified. One rule of thumb is that if the employer controls how work is performed, such as requiring 40 hour week, or requiring presence in the office 40 hours per week, the employee is most likely not an independent contractor. Even if an employer does not expressly control the work performance, it can still impact whether an employee is legitimately an independent contractor.
Legally, the courts will look at a few factors:
- Is the work the employee performs essential to the business existence?
- Does the employees pay directly depend on the financial success of the business?
- Does the employee or employer supply the tools that are necessary for the work to get completed?
- Where is the working being completed from?
- Is the employee working long-term or on a project basis?
The bottom line is that independent contractors do not have the same rights that employees have. Typically an independent contractor is not protected the same way that employees are. Independent contractors are responsible for paying their own tax contributions. They must also pay individually for unemployment benefits, disability insurance, and social security.
If you were labeled and independent contractor and believe that you should be considered an employee, our labor law attorney can help you determine if you have been mislabeled. If you are misclassified and feel that you should get paid overtime, call our Los Angeles Employment Attorney now. We can help you get the wages you deserve!