Federal law requires employers to pay employees additional benefits that independent contractors are not entitled to receive. Typically, it costs more money for companies to have employees – nearly 30 percent more – because the employer has to pay minimum wage, overtime, payroll taxes and provide benefits. For years, employers have attempted to skirt these federal laws by misclassifying 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 and receive the protections they are entitled to under federal law.

The issue of misclassification is important to both workers and employers because 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.

If you have been misclassified, you may be able to file a claim for unpaid overtime wages – which means you might be entitled to receive back wages for the overtime your worked. If your employer violated federal law by not paying you overtime, you may be entitled to recover the following monetary damages:

• your unpaid overtime multiplied by two (2)
• plus attorneys’ fees and costs.

There are many factors that go into determining whether an employee has been misclassified as an independent contractor; if you feel that you are doing a job that is integral to the company’s routine business functions, receive training in your position, and do the same type of work as your peers but do not receive overtime pay for you work, you have likely been misclassified as an independent contractor. Even if you signed a document stating that you are an independent contractor, you may still be considered an employee who is entitled to all employee benefits.

There are numerous 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

No, the fact that you signed a contract agreeing to be classified as an independent contractor is not the end all be all. Even if you agreed at the onset to the independent contractor classification, legally, you may still be considered an employee who is entitled to all employee benefits.

Ultimately, the law requires employers (not employees) to know the law and properly classify workers as either independent contractors or employees.