Are You an Independent Contractor?

For years, employers have attempted to skirt employment laws by classifying workers as “independent contractors.” In recent years, workers have started to fight back by filing lawsuits to challenge these independent contractor designations. Even workers working in the new gig-economy such as ride-sharing, errand runners, personal shopping assistants have started to fight for their rights to be properly classified as employees as opposed to independent contractors.

For instance, several dozen Lyft drivers throughout the state of California have initiated a lawsuit against the Lyft company on the basis that workers are not being adequately compensated. According to the lawsuit, drivers at the company are receiving less than $8 an hour, which is much less than California’s current minimum wage of $11 an hour. Part of the lawsuit is based on a May 2018 decision in the California Supreme Court stating that workers will be classified as independent contractors only if they meet certain requirements including that the worker is free from the control of the hiring entity in connection with how work is performed, that the worker performs work that is outside the usual course of the hiring entity’s business, and that the worker is primarily engaged in an independently established trade or occupation.

The lawsuit, like most lawsuits involving independent contractor misclassification cases, argues that by classifying most of its workers as independent contractors, Lyft saves millions that it otherwise would be required to pay for things like overtime compensation, health insurance for drivers, unemployment insurance, and other types of benefits.

There is not a easy one-size fits all test to determine whether a worker is an employee or an independent contractor. In fact, even if a worker enters into a contract with an employer concerning his or her status as an independent contractor or employee, this is not controlling; the actual relationship between the employer and worker controls the classification as opposed to contracts or agreements.

The Factors that Distinguish Independent Contractors and Employees

The issue of misclassification is important to both workers and employers: independent contractors do not receive benefits like overtime. Employers frequently attempt to save money by classifying workers as independent contractors when the workers are actually employees. In most situations, a worker is properly classified as an employee when the employer controls the manner and method of the employee’s work performance. An independent contractor, however, is a worker who is much less controlled by the employer in the manner that work is performed.

There are numerous other factors that courts analyze when deciding if a worker is an independent contractor or employee. Some of these include:

• The degree of control that the parties exercise over the details of the work performed
• Whether the hired party is engaged in a distinct business
• Whether the work performed is ordinarily performed under supervision
• The skill required in the worker’s profession
• Whether the hiring party supplies the equipment to perform the job
• The time that the worker is engaged by the employer
• Whether the work performed is part of the hiring party’s regular business
• Whether the individuals believes an employment relationship is created
• Whether the worker receives employee benefits
• Whether the employer withholds income and social security tax
• Whether the employee has the right to take on additional projects

Again, even if there is an independent contractor agreement on file between you and your employer, or if you agreed to the classification at the onset of the working relationship, legally, you may still be considered an employee who is entitled to all employee benefits.

Ultimately, the law requires employers to recognize the difference between independent contractors and employees and properly classify workers.

Speak with an Experienced Wage and Hour Lawyer

If you believe that you were falsely classified as an independent contractor, you should not hesitate to speak with an experienced employment attorney. At Herrmann Law, we understand the numerous complications faced by workers and are prepared to do what it takes to make certain that you receive the compensation you deserve. Contact Herrmann Law today to schedule an initial case evaluation by calling our office: 817-479-9229 or filling out our online questionnaire, and someone from our office will contact you.