Were You Misclassified As An Independent Contractor?
America is quickly transitioning to a “gig economy,” where workers need to string together a series of smaller jobs rather than work for a single employer. This model provides some advantages to workers, but it is companies that are most likely to benefit from it. And because employer-employee relationships are now so loosely structured, many employers are misclassifying workers as independent contractors.
If you’ve been misclassified, you are likely missing out on full pay, benefits and important legal protections. Asserting your rights and fighting back starts with a call to the attorneys at Schwartz Law Firm.
Why Do Employers Misclassify?
There are instances in which a genuine error is made because classification isn’t obvious. But in most cases, employers intentionally misclassify workers as ICs to save money and avoid regulation. This includes:
- Not being bound by the laws governing minimum wage or overtime pay
- Paying less in taxes (because the burden is shifted to the workers)
- Preventing the workers from unionizing or organizing
- Avoiding paying benefits in the form of employer-based health insurance, pension plans and disability benefits
- Avoiding liability for discrimination and other workplace civil rights violations
The good news is that both the state of Michigan and the federal government have a vested interest in correcting misclassification (because it results in lost tax revenue). Therefore, your complaint is likely to be heard and investigated.
What Makes A Worker An Employee Vs. An Independent Contractor?
One of the most important factors that defines an independent contractor is independence. The company hiring the IC makes an agreement to receive a specific service, good or work outcome, but how this is achieved is largely left up to the contractor. He or she has control over how and when the work gets done, without much oversight from the hiring company.
If the employer has significant control over the behaviors, schedule and day-to-day responsibilities of the IC, it is likely that the worker is an employee and was misclassified. Here are some examples that suggest a worker is actually an employee and not an independent contractor:
- The worker has a set schedule and detailed expectations as to how work should be performed
- The company provided training
- The employment relationship is ongoing, and the demands of the job make it difficult for the IC to work with any other company during the same time period
- The company controls key financial aspects of the worker’s job, including when payment occurs, which expenses can be reimbursed, etc.
The line between an independent contractor and an employee is not always clear. But most of us have a good sense of how much freedom and autonomy we are given at work. If something feels wrong about the way your job was classified, it is worth discussing with an attorney like those at our firm.
Get Your Questions Answered In A Free Consultation
With an office in Farmington Hills, Schwartz Law Firm serves clients throughout Oakland County and the Detroit area. To take advantage of a free initial consultation with one of our skilled employment law attorneys, call us at 888-757-1681 or send us an email.