Independent Contractor v. Employee Rights
When being hired for a job, a worker’s classification as either an “Employee” vs. an “Independent Contractor” is often determinative of whether the worker is covered under certain laws which establish your rights within the Employer-Employee relationship.
LIMITED RIGHTS FOR INDEPENDENT CONTRACTORS
Independent Contractors and freelancers have limited legal rights compared to those individuals hired as employees. Employees are afforded a plethora of rights which prohibit discrimination, provide rules for overtime, mandate a safe workplace and prohibit retaliation against an employee who complains of discrimination or illegal conduct in the workplace. Examples include:
- The Fair Labor Standard Act (FLSA), which governs overtime and minimum wage laws, does not apply to independent contractors. Therefore, independent contractors have no rights to require an employer to pay them overtime or the minimum wage.
2. Laws protecting workers against unlawful discrimination and retaliation, including but not limited to: Title VII of the Civil Rights Act of 1964; The Americans with Disabilities Act; The Equal Pay Act; the Age Discrimination in Employment Act; the FMLA; the Florida Civil Rights Act; and many whistleblower statutes do not apply to independent contractors.
3. Independent contractors are not entitled to unemployment insurance nor are they entitled to receive workers compensation in the event they are injured on the job.
4. Independent contractors are not covered by the National Labor Relations Act. This means that employers can prevent their workers from organizing and forming a union by misclassifying them as independent contractors.
MISCLASSIFICATION OF EMPLOYEES AS INDEPENDENT CONTRACTORS
Employees are often misclassified and so it’s important to examine whether or not the classification established by your employer is a correct and valid one.
The Department of Labor, Fact Sheet 13, describes some of the criteria indicative of “employee” status which gives rights to overtime compensation and other wage benefits under the Fair Labor Standards Act. While the Supreme Court has found that there is not a single rule on how to determine whether a worker is an employee or independent contractor, it is the totality of the circumstances which will control. The Supreme Court has considered the following to be indications that an individual should be classified as an “employee”:
- The extent to which the services rendered are an integral part of the principal’s business.
- The permanency of the relationship.
- The amount of the alleged contractor’s investment in facilities and equipment.
- The nature and degree of control by the principal.
- The alleged contractor’s opportunities for profit and loss.
- The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
- The degree of independent business organization and operation.
COMMON MISCONCEPTIONS OF INDEPENDENT CONTRACTORS
- Employers may not misclassify an employee as an independent contractor even if the employee agrees.
- An employee is not an independent contractor under the FLSA merely because they work off-site or from home.
- Receiving payment as a 1099 employee does not make you an independent contractor under the FLSA.
- Whether you are getting paid by cash, on the books or off the books you may still be an employee under the FLSA.
WHAT TO DO IF YOU THINK YOUR EMPLOYER IS MISCLASSIFYING YOU AND YOUR RIGHTS HAVE BEEN VIOLATED
Talk to your Employer. Talk to your employer to see if they will review your classification and reclassify you as an employee. Explain to them that you believe you have been wrongly classified as an independent contractor. You may want to prepare a written communication to confirm your inquiry. At the very least you may get an explanation as to why they believe you are an independent contractor.
Contact an Attorney. Often, employees are indeed misclassified as independent contractors. Accordingly, you may have significant employment rights that protect them from discrimination, wage theft, and unsafe working conditions. If you believe you may be misclassified a qualified employment lawyer may be able to analyze your particular situation and advise you as to whether you are entitled to exercise your employee rights and the correct steps to take to protect these rights.