Good Judgment. Wise Counsel. Aggressive Representation.

Are you missing out on overtime and benefits?

On Behalf of | May 2, 2016 | Employment Law |

How would you know in the first place? Uber-ization of the workforce has fractured the relationship between employers and workers. More people than ever are classified independent contractors.

The use of subcontractors, temp agencies, third-party management and labor brokers have exploded. The practice has expanded from the construction field, to software development and the film industry. Some workers are even finding that there classification changes mid-year without their say.

Employee versus independent contractor

Whether you operate heavy equipment for one construction firm or install cable services to homes, classification affects your pay and benefits. Here is a list of some things that employees receive but contractors generally do not:

  • Benefits such as a retirement plan and health insurance
  • Overtime on hours worked above and beyond the 40-hour workweek
  • Split payment of employment taxes (i.e. Social Security and FICA).

Last summer, the U.S. Labor Department’s Wage and Hour Division put out new guidance for employers clarifying the definition of employee. The agency expressed concern that many workers are being classified improperly.

Receiving a 1099 is not the final word on whether you should be classified a contractor. You should know that workers are presumed to be employees.

What else do you need to know about the classification rules?

The interpretation letter published by the DOL discussed the “economic realities” test. There are several broad categories:

  • Integral nature of work to the business – if an employer is economically dependent on the work you do, you should be classified an employee. A carpenter working for a framing company should probably be an employee as opposed to someone doing online marketing for the firm.
  • Who takes the profit or loss – volunteering to work additional hours to earn more with a cleaning service does not make you a contractor.
  • Permanency of the relationship – working for one client versus many over several years is common of an employee relationship.
  • Level of control – having no control over the hours, pay or when the work is performed is indicative of an employer/employee relationship.

This is a partial list of factors. This weighing process involves a lot of gray area. If you have concerns after receiving a 1099, contact one of our employment attorneys at NachtLaw to discuss your work situation.

The DOJ takes misclassification seriously. You may be entitled to back wages for overtime that you worked in addition to other remedies. Asking questions is often the only way to ensure that you receive fair pay for your work.