Misclassification Attorney—Independent Contractor Misclassification

What is misclassification and why is it important? To start, every worker has a classification. Employers classify every worker as either exempt or non-exempt. These classifications are quite important, because exempt workers are not entitled to overtime pay, but non-exempt workers are. One type of exempt worker is an “independent contractor.” Employers very often misclassify workers, who should be employees, as independent contractors in order to exclude those workers from overtime pay. But a worker is not an independent contractor just because the employer says so; there are specific requirements.

The Fair Labor Standards Act (“FLSA”) is the federal law governing overtime pay. FLSA requires employers to pay covered employees the minimum wage. FLSA further requires employers to pay covered employees overtime pay if the covered employees work more than 40 hours in a given workweek. Whether or not an employee is covered under FLSA depends on that employee’s classification.

In general, FLSA exempts “white collar” employees from overtime pay, including independent contractors. But an independent contractor is a specific type of worker and the are several factors differentiating an independent contractor from an employee:

1. An independent contractor’s work is less likely than an employee’s work to be integral to the employer’s business.
2. An independent contractor’s managerial skills are more likely than an employee’s managerial skills to affect the independent contractor’s opportunity for profit or loss.
3. An independent contractor is more likely than an employee to make some independent investment in the necessary facilities and equipment.
4. An independent contractor is more likely than an employee to exercise independent business judgment.
5. An independent contractor is more likely than an employee to have an indefinite working relationship with the employer.
6. An independent contractor is less likely than an employee to be subject to the employer’s control.

These factors are each complex and subject to scrutiny; employers often make mistakes. An experienced attorney can help determine whether or not an employer has properly applied these criteria.

In general, California law defines an independent contractor in much the same way as federal law. If a California worker disputes his or her classification, California law presumes that the worker is an employee and requires the employer to prove otherwise. California law considers factors in addition to federal law, including, but not limited to:

• Whether or not the worker is paid by salary / hourly wage or by project;
• Whether the work requires a special skill.

If an employer misclassifies an employee as an independent contractor, then the employer may owe the employee compensation for unpaid overtime and missed breaks.

The independent contractor misclassification is one of the most common employer classification errors. Because, both California and Federal law require a complex factual determination to determine whether a worker is an independent contractor, employees and employers alike can be confused. But a knowledgeable attorney can help. If you believe your employer has improperly classified you as an independent contractor, call the skilled misclassification lawyers at Nassiri Law Group today for a free case consultation. Call today at (949) 375-4734.