How Do I Know If I’m An Employee Misclassified As An Independent Contractor?
Employee misclassification has become an increasingly important issue in recent years, particularly with the growth of the service sector and the so-called “sharing economy.” Well publicized misclassification lawsuits have been filed against companies like Uber and Lyft. According to the California Labor Commissioner, at least ten million workers are classified as independent contractors nationally, an increase of more than two million in just six years.
Workers who find themselves misclassified as independent contractors or “1099ers” are at a serious disadvantage. When a worker is misclassified as an independent contractor, he or she is not protected by California’s minimum wage and overtime laws. Misclassified workers are not covered by workers’ compensation and may receive no compensation if injured on the job, have no right to family leave, no unemployment insurance and no protection against retaliation by the employer.
If you believe you are a victim of workplace misclassification, you have rights and should contact an experienced employment lawyer today. The Orange County, California based Law Offices of Corbett H. Williams specializes in helping employees who have been treated unfairly at work.
How do I Know Whether I’m Misclassified As An Independent Contractor?
Determining whether you have been misclassified starts with two basic rules:
First, your employer cannot legally transform you from an employee into an independent contractor simply by calling you an “independent contractor,” issuing you a 1099 rather than a W-2, or even by having you sign a contract stating that you are not an employee. Whether you are an employee or an independent contractor is determined by the circumstances of your work, not whether your employer considers you an independent contractor.
Second, under California law, workers are presumed to be employees. This means that in any lawsuit against your employer, the court always starts with the assumption that you are an employee. It’s up to the employer to provide evidence proving that you are an independent contractor. Cal. Labor Code § 2750.5.
In California, there is no set definition of “independent contractor.” It always depends on the facts of the particular case. The more control the hiring person or company has over the worker, the more likely the worker is an employee, and not an independent contractor. If there is control over the “manner and the means” of the work, the worker is an employee. If the hiring person or company has the right to terminate the relationship at any time for any reason (i.e., the relationship is “at will”), the worker is also likely to be an employee. Lawyers look at different factors to help guide this determination, some of them are:
- Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
- Whether or not the work is a part of the regular business of the principal or alleged employer
- Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
- The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
- Whether the service rendered requires a special skill;
- The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
- The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
- The length of time for which the services are to be performed;
- The degree of permanence of the working relationship;
- The method of payment, whether by time or by the job; and
- Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.
Even where there is no control over work details, the worker is an employee if: (1) the principal retains pervasive control over the operation as a whole, (2) the worker’s duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. (Yellow Cab Cooperative v. Workers Compensation Appeals Board (1991) 226 Cal.App.3d 1288).
What Can I Recover In A Lawsuit If I’m Misclassified?
Thankfully, California law gives misclassified employees powerful weapons to fight back. Recovery can include penalties, unpaid overtime, reimbursement of employment-related expenses and attorney fees. Here are some specifics:
Misclassified employees can recover penalties of $5,000 to $15,000 for each violation, or $10,000 to $25,000 for each violation if the employer is engaging in a “pattern or practice” of misclassification. Cal. Labor Code § 226.8.
Under California’s Private Attorney General Act (PAGA), misclassified employees may collect these penalties in a representative action on behalf of other workers misclassified by the same employer. Awards can be substantial since a successful employee keeps 25% of the penalties collected, while 75% go to the state.
Employees can also recover their expenses and losses under California Labor Code Section 2802. These business expenses could include things like personal vehicle use, equipment, tools, fuel, and other similar costs that should have been paid by the employer.
Misclassified employees may also be entitled to minimum wage and overtime pay.
Successful employees who file a lawsuit will also be entitled to attorney fees. Cal. Labor Code § 218.5.
Know Your Rights – Contact Our Orange County Office Today
The Orange County based Law Offices of Corbett H. Williams is an elite law firm that represents employees in discrimination, harassment, retaliation, wrongful termination, wage & hour and other employment matters. Strict time limits may apply to your claim, so you shouldn’t wait. Contact us today at 949-679-9909 or use the contact form at the bottom of this page, and we will respond promptly.