I’ve heard it many times over the past few years–things such as “my employer couldn’t afford to pay me overtime,” or, “I didn’t have the option to be an employee.” Whether to classify an employee as an independent contractor or employee is not at the employer’s discretion. There are certain laws employers have to follow when making this classification. If you are taking on a new job, it is important to have an employment law attorney review your employment contract for many reasons. One of the most important reasons is your classification as an employee or independent contractor. This classification makes a difference for many reasons.
If an employer classifies an employee as an independent contractor, they may be able to avoid certain taxes, insurance costs, employment laws, and other costs associated with having an employee. At the same time, these are benefits the employee is surrendering by allowing an employer to misclassify their status. While the job market is incredibly dismal, an employee should not allow an employer to misclassify them—the consequences to the employee can be extreme.
For example, employers are not required to pay independent contractors overtimes wages under the Fair Labor Standards Act. This means, that if you work over 40 hours a week and are paid at an hourly rate, you do not receive 1 and 1/2 times your hourly rate. Employers may, and often do, take advantage of this classification, and demand workers to work excessive hours without fair compensation.
If an independent contractor does misclassify a worker as an independent contractor, there are extreme consequences that can be achieved through litigation. While these remedies exist, the goal of Edelman, Liesen & Myers LLP is to make the workplace a safe, fair, and just place for an individual to make a living. Therefore, having an employment law attorney review your employment contract before you encounter problems such as this can save you time, emotional distress, and money in the future. Pointing out to an employer that they may be misclassifying BEFORE the damage is done is a benefit to both employer and employee.
To learn more about this issue, speak to an attorney at Edelman, Liesen & Myers, LLP.