Employees in California are entitled to many workplace benefits by the federal and state governments. These include minimum wage and overtime pay, rest and meal breaks, workers’ compensation insurance, unemployment insurance, reimbursement of business related expenses, and paid sick leave.
However, some employers purposely misclassify their employees as independent contractors. When employment misclassification occurs, the employee, whether temporary or permanent, loses his rights to the benefits he is entitled to.
Why Employees Get Misclassified
Cases of employment misclassification are widespread in the United States. According to numerous state-level studies, around 10-20% of employers misclassify at least one of their workers as an independent contractor. This type of misclassification helps employers save on labor costs, which are often a major part of the overhead for businesses. Tax evasion may also occur since employers are only obliged to pay their employees’ taxes and not their independent contractors’.
Why It’s Important Not to Get Misclassified
The general rule is that an employer who hires you to do work for him is an employer. The Internal Revenue Service (IRS) defines an independent contractor as someone who has his own capital and works independently from his employer. The employer only has control of the results of your work if you’re an independent contractor and won’t have any control over your daily activities, including your financial operations.
If you are classified as an independent contractor but do not control your operations nor how you perform your tasks, then you are actually an employee, in which case you should be afforded all the rights and benefits under the law.
Moreover, if you’ve been misclassified as an independent contractor, you won’t have access to the full range of employment and labor law benefits, which include, but aren’t limited to:
- Laws on workplace discrimination
- Laws on workplace harassment or retaliation
- Labor laws relating to minimum wage, overtime pay, rest and meal breaks, and vacation and medical leaves
- Laws against wrongful termination
What You Should Do if You’ve Been Misclassified
Misclassified employees are effectively denied access to crucial benefits and protections that they’re entitled to under the law. If you believe that you’re not being provided with your rightful benefits as per state and federal laws, then you have the right to seek damages against your employer for unpaid benefits and other non-monetary losses.
However, you shouldn’t try to negotiate your claims in your own. The first thing you should do is report this matter to your HR. If your concern isn’t being addressed properly, then it’s in your best interest to seek legal help from reputable labor law lawyers in Los Angeles and sue your employer for misclassification.
Your lawyer can assist you in the following areas:
- Advise you on the legal processes you can to take
- Show you how to gather information and evidence to support your claim
- Identify the types and amount of damages you can claim against your employer
- Advise you on the next course of action to take while your case is ongoing
Employers who deliberately misclassify their employees can be subject to steep employee misclassification penalties. If the Labor and Workforce Development Agency or court finds that an employer has willfully misclassified a worker as an independent contractor, California’s Labor Code provides that the employer shall be subject to a civil penalty of between $5,000 and $15,000 for each violation.
