EMPLOYEE OR CONTRACTOR? It pays to find out.

EXEMPT OR NON-EXEMPT? Misclassification deprives workers of wages, benefits, and legal protections.

WE DELIVER RESULTS NATIONWIDE for misclassified workers.

Misclassification cases are complex — we are up to the challenge.

Misclassification of workers may affect their wages, taxes, and rights to benefits, including overtime pay, vacation time, meal breaks, Workers’ Compensation, and legal protections.

If you are a worker who has been misclassified, you deserve a proven, legal advocate to stand up for your rights and hold your employer accountable. If you are an employer confronting the shifting landscape of employment classification law, now is the time to seek professional counsel to better understand the full scope of your potential liabilities and responsibilities

Employee or Contractor

Misclassification of employees as contractors is a widespread and growing problem. Studies suggest that 10 to 20 percent of employers misclassify at least one employee. The internet and proliferation of mobile apps has fueled the growth of a sharing economy, which ostensibly allows assets and services to be shared among private individuals. In reality, the sharing economy enables large companies to reap enormous profits by using on-demand workers who are treated as contractors instead of employees.

The difference between an employee and a contractor continues to be in dispute. In 2018, the California Supreme Court made a landmark decision by adopting an ABC test that employers must pass to legally classify workers as independent contractors. Among other things, this test includes a strict provision that workers cannot be classified as contractors unless they are only performing tasks outside of the company’s usual course of business.

More states are introducing laws to clarify the distinction between employees and independent contractors. The following lists some of the characteristics reflected in state and federal laws:

Employees

  • Employer controls how/when/where work is done
  • Must follow a defined work schedule
  • Use employer-supplied equipment
  • Receive training from employer
  • Work only for the employer

Contractors

  • Establish their own boundaries
  • Set their own hours
  • Use their own equipment
  • Do not need training
  • Work for multiple companies

Why Do Employers Misclassify Workers?

While some employers may unintentionally misclassify workers, many follow this illegal practice deliberately. Employers have many reasons for intentionally misclassifying employees as contractors, including the following:

  • Reduce the amount of payroll taxes
  • Avoid paying for Workers’ Compensation insurance
  • Circumvent their responsibility for providing health insurance
  • Bypass federal laws, including the Fair Labor Standards Act (FLSA) and the 1986 Immigration Reform and Control Act

In addition, workers who are classified as independent contracts are in a much weaker bargaining position regarding the wages they receive. They are also more likely to be cheated out of wages they have duly earned.

Exempt or Non-exempt?

Employers may also be motivated to misclassify employees as exempt when they should be non-exempt. Exempt employees do not qualify for minimum wages or overtime pay. Non-exempt employees must be paid at least the minimum hourly wage and are entitled to receive overtime pay, as well as rest breaks and meal breaks. The distinction between these two categories may be determined by the worker’s salary level, salary basis, level of education, and the duties he/she performs. Non-exempt employees who have been misclassified as exempt are legally entitled to lost wages.

Our Employment Classification Lawyers Provide Sophisticated Legal Counsel to Untangle the Complexities of Misclassification

The laws governing misclassification continue to evolve. Misclassified employees now have more leverage in filing claims for lost wages and benefits. Multiple class action suits are pending. Businesses relying on independent contractors must determine if and how they can remain in compliance with changing laws. Parties on both sides should seek professional legal advice. The skilled employment classification lawyers at Miller Shah LLP have represented employees, as well as employers, in lawsuits concerning violations of federal and state statues, as well as the Fair Labor Standards Act. For more information, contact us online or call us at 866-540-5505.

Latest Blog Post

  • Pennsylvania Misclassification Task Force Holds Eighth Meeting
    Pennsylvania’s Joint Task Force on Misclassification of Employees (“Task Force”) held its eighth meeting of the year on August 26, 2022, the fifth in-person meeting since its assembly in January 2021. The Task Force is a bipartisan group of nominated volunteers representing business, labor, and government seeking to publicize a comprehensive understanding of worker misclassification and its consequences.

    Read More

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