Misclassifying Employees as Independent Contractors

by | Jun 18, 2020 | General Employment Law

To start off the California Workplace Rights Blog, the blog is reviewing 10 of the most often violated employee wage and hour rights. The number 3 on the list is misclassification of an employee as an independent contractor.

Very few workers are truly independent contractors. A key test of whether a worker is an independent contractor or an employee is how much control the employer has.  If the employer tells the independent contractor how to do his or her job, what time to arrive and leave work, etc., then the independent contractor is most likely an employee.

The California Department of Industrial Relations has a list of factors to help determine whether a worker is an independent contractor or an employee.  The list is available at http://www.dir.ca.gov/dlse/faq_independentcontractor.htm

Being misclassified as an independent contractor can hurt an employee in many ways.  The employer doesn’t have pay its portion of social security and medicare taxes (e.g. FICA).  The employer’s portion of FICA is 7.65% percent.  That means the misclassified employee will have to pay an extra 7.65% of his or her salary in taxes that the employer should have paid.  The employer will also not contribute to state unemployment insurance on behalf of independent contractors so if the independent contractor loses his or her job, it’s possible he or she may not receive unemployment benefits.  Overtime and other wage and hour laws do not apply to independent contractors.  An independent contractor also does not receive benefits such as health insurance, sick leave and vacation pay that an employer provides to regular employees.

If you are concerned you may have been misclassified as an independent contractor email or call the Law Offices of G. Samuel Cleaver at 323-648-6676 for a free consultation today.