It seems that almost everyone these days has some sort of side-gig, whether it's freelancing online or hustling fares as a rideshare driver. Unfortunately, some people are being denied their rights as workers because their employers insist on misclassifying them as "independent contractors" instead of employees.
Before you accept a designation that doesn't give you fair access to workers' compensation, unemployment, health benefits, and sick leave, this is what you need to know.
Why do companies like to hire independent contractors?
Independent contractors are being used in more and more occupations. For example, Lyft and Uber are both well-known companies that essentially were built on the idea that independent contractors could be used as part of a business model. Independent contractors are convenient for companies because employers don't have to worry about paying taxes or obeying most labor and employment laws.
What makes the difference between an employee an independent contractor?
You aren't an independent contractor simply because your boss says you are. Instead, the exact nature of your relationship with your employer has to be evaluated. Generally speaking, the more control a company exerts over a worker, the more likely that worker has to be treated as an employee, not an independent contractor.
If there is any doubt about whether or not someone is an employee or not, these are the factors that are usually considered most telling:
- Does the employer dictate how, when, and where the work is done?
- Does the company hire workers who are already skilled and able to function with minimal training, or is training required?
- How integrated is the worker's position in the business?
- Can the worker subcontract his job to someone else or not?
- Can the worker hire assistants?
- Does the company control the worker's schedule or does the worker have the right to do so?
- Is the worker providing their own tools?
- Is the worker able to provide services to more than one company?
The less autonomy you have over your own work-life, the more likely you are an employee instead of an independent contractor.
What should you do if you believe you've been wrongly classified?
Quite often, workers don't realize that they've been misclassified as independent contractors. They simply assume that the company knows what it is doing when it pays them via a 1099 form instead of a W2. Being misclassified often comes to light when an employee gets injured and there's a need for workers' compensation or unemployment benefits.
If you believe that you were an employee despite your company's assertions that you were only an independent contractor, an employment attorney may be able to protect your rights.