What happens if my employer misclassified me as an independent contractor?

A worker misclassified as an independent contractor can sue to enforce her rights under California employment laws. That includes the right to sue to recover unpaid overtime and minimum wages, meal and rest break premium payments, business expenses, as well as the right to seek unemployment insurance payments.

What are some common mistakes employers make when they hire independent contractors?

Incorrectly classifying W-2 employees as 1099 independent contractors also strips the worker of the benefits they would receive as W-2 employees. Companies who incorrectly classify employes as contractors do save money in workers compensation, payroll taxes, paid time off, benefits and retirement accounts.

When an independent contractor is really an employee?

California Law states that a worker may be considered an independent contractor if (1) the worker has the right to control the performance of services, (2) the result of the work is the primary factor bargained for, and not the means by which it is accomplished, (3) the worker has an independently established business.

Why would an employer misclassify employees as independent contractors?

Employers misclassify employees as independent contractors to save on paying for employee benefits, employment taxes, and workers’ compensation and unemployment insurance premiums which, as previously noted, can add up to 30\% on top of wages.

Can I sue my employer for misclassification?

Workers who are treated as contractors—but should be classified as employees—may be able to file a lawsuit against the company they work for and recover back pay and other benefits. …

Should HR be involved with contractors?

Your policy should explain that HR is responsible for the overall management of the selection and hiring processes of contract workers. It should also outline the steps that a manager needs to take when hiring a contractor.

Can you be fired as an independent contractor?

Companies may fire employees, but no one can “fire” an independent contractor – at least not in terms of separating a person from employment. Contractors aren’t employees, so they aren’t governed under applicable labor law.

Why do employers frequently try to pass off employees as independent contractors?

[1] While some employers misclassify their workers as independent contractors in error, often employers misclassify their employees intentionally in order to reduce labor costs and avoid paying state and federal taxes.