INDEPENDENT CONTRACTOR VS. EMPLOYEE

Small employers are notorious for misclassifying their employees as independent contractors in order to avoid labor laws. However, our firm has prevailed against large employers that misclassified their employees as independent contractors. Thus, both large and small employers can be guilty of misclassifying their employees as independent contractors. Employees misclassified as independent contractors are owed overtime, double time, meal breaks, and rest breaks if they are nonexempt. If they are exempt employees they are owed 30 days waiting time penalties if they were not fully paid on time, and PAGA penalties for a failure to pay them as often as employees must be paid.

If you worked on the premises of the employer using their tools, were supervised by them, and subject to their work and reporting rules it is unlikely you were an independent contractor. California Labor Code Section 2750.5 creates a rebuttable presumption a person performing services without a license is an employee. Employers can rebut the presumption of employment if:
1.) The individual has the right to control, and discretion as to the manner of performance of the services in the result of the work and means to accomplish it;
2.) The individual is customarily engaged in an independently established business;
3.) The individual’s independence is not a subterfuge to avoid employee status;
4) Cumulative factors in establishing one is an independent contractor include substantial investment other than personal services in the business, holding out to be business for oneself, bargaining to complete a specific project for compensation by the project rather than time, control over the place the work is performed, supplying the tools or instrumentalities used in the work, hiring employees, customarily performing work that requires a particular skill, holding a license, and performing work not customarily within the employee’s business. It is difficult for a California employer to prevail in a misclassification case. Whether a worker has been misclassified as an independent is typically a factually intensive issue in which the employer loses.

OVERTIME FOR INDEPENDENT CONTRACTORS

Independent contractors who do the same work as an employee performing the same position are probably not independent contractors. CLICK HERE TO READ ABOUT OVERTIME If the work being done is the general work the business is engaged in the worker is most likely an employee. If the worker is paid by the hour, forced to keep track of their hours, and generally supervised by the company they are an employee.

Cumulative factors in establishing
an independent contractor include

Our law firm has handled cases in which misclassified employees are owed great amounts of overtime. In a Federal Collective Action $525,000 was obtained. Recently $800,000 was obtained for a group of 12. We obtained $175,000 for adult night club performers who were misclassified, and $120,000 against a large employer who misclassified a few writers as independent contractors. If the employer’s goal is to get somebody to work many hours a day, or per week, and avoid paying them overtime because they are called an independent contractor the case may have great value. Overtime rules are somewhat complicated. For example, if the employee does not get a day off after a certain amount of time they may be entitled to double time for their shift. Overtime is both daily and weekly. If the employee is working many hours a week the overtime claim can add up. A failure to pay overtime and/or double time leads to many Labor Code penalties. The value of an overtime case is not merely the overtime, and interest. Because employees usually miscalculate the amounts they are owed for overtime we recommend you contact an experienced overtime lawyer who can make proper calculations from the employer’s records or lack thereof.

MISCLASSIFIED AS INDEPENDENT CONTRACTOR

Employees misclassified as independent contractors have several labor issues besides merely being entitled to overtime and double time. The misclassification of an employee as an independent contractor creates Private Attorney General (PAGA) issues. Under this special section of the California Labor Code our law firm can sue for penalties normally only the Industrial Welfare Commission can obtain. In PAGA lawsuits the employee ends up getting 25% of the otherwise government penalties. PAGA penalties add up quickly. We have handled many PAGA actions in which thousands of dollars in PAGA penalties exist for each employee, for each pay period. PAGA penalties may exceed the actual money owed to the employee for the non-PAGA pay due.

Employees improperly called independent contractors may find themselves in need of workers compensation remedies if they are hurt on the job. If you were injured at work and your employer is denying that you were an employee please contact our office at 1-877-525-0700.

Our law firm has experience proving employers have misclassified the worker, and so the worker is entitled to the legal remedies an employee is entitled to. Please let us assist you.