One of the oldest tricks in the book is for employers to misclassify their employees. Instead of labeling them as employees, they treat them like independent contractors. Doing so helps them escape many of the obligations employers have to employees. However, whether someone is an employee or independent contractor has to do with more than the employer’s designation. Even if your boss calls you an independent contractor, the law may consider you an employee.
You might not think your classification is important. In fact, you may not see a difference in your paycheck — or even bring home a little more money — if your employer considers you an independent contractor. However, in many companies, employees get substantial benefits and protections, such as the right to overtime pay, eligibility for employee benefits, and even some workplace protections. Talk to an Atlanta salary & independent contractor misclassification lawyer to learn more. The employment attorneys at Feldman Legal Group are ready to review your case.
Determining Whether Someone Is an Independent Contractor or an Employee
State laws can help determine whether a person is an employee or a contractor. However, the best way to tell is to look at IRS rules and guidelines. These rules can help employers and workers determine the correct nature of their working relationship.
One of the top factors to consider is the degree of control the employer or client has over the worker. If the person is a contractor, then the client can dictate a particular result, but not necessarily a process. Contractors may choose where they work, how they work, and, in some scenarios, the hours they work. On the other hand, if the employer has a specific way to do something the worker must follow, it is more likely to be an employer-employee relationship. This test is not black and white. It depends on whether safety rules or other outside factors can dictate the process.
Another factor to consider is whether the worker is using their tools, resources, and materials to complete the job. Generally, contractors provide their own materials, while employees use materials supplied by the worker. Again, this test is not absolute.
If a worker runs their business like a business, then the relationship is more likely to be contractor-client. Does the worker invest in their business and look at profits and losses? If not, then it may more closely resemble an employer-employee relationship.
Finally, it can be essential to consider the nature of the work. Contractors are more likely to be specialists with unique skills reflecting the nature of their employment. If anyone could do the job with the training provided by the employer, then that person is probably an employee.
While none of these factors alone dictate whether someone is an employee or a contractor, it is critical to note that the employer’s classification of the worker is not even a factor. Instead, the IRS looks at the actual working conditions to determine whether someone is an employee or an independent contractor. An independent contractor misclassification and salary lawyer in Atlanta could help determine whether a person is labeled correctly.
Misclassifying Employees as Independent Contractors
There are many reasons an employer might misclassify an employee. First, they could be mistaken about the classification — this is more likely for small business owners. However, they often misclassify workers in order to save money. Employers may need to pay taxes and benefits to employees. In addition, wage and hour restrictions, including overtime pay, apply to employees but not contractors.
Some fields are known for misclassifying workers. Sales representatives, physical laborers, and drivers are frequently labeled contractors, even when they are employees. In addition to the IRS guidelines, some groups look at whether the worker is economically dependent on the employer. When an employer is a contractor’s only client, it is easier for an Atlanta lawyer to argue the employee was misclassified as a contractor.
Speak to an Atlanta Attorney about Salary & Independent Contractor Misclassification
If an employer has misclassified you, you could be entitled to substantial compensation. Workers can get up to five years of back pay and benefits, as well as other damages, if they were wrongfully treated as independent contractors.
Since the issue depends on facts, you may need the help of an Atlanta salary & independent contractor misclassification lawyer to determine your rights. Schedule a consultation to discuss your situation and find out more.
