Many people think that earning an income works by getting a job, becoming an employee and earning a wage. However, that type of scenario does not apply to every situation. Some people choose to work as independent contractors and some employers insist that certain of their workers provide their labor as independent contractors.
For many jobs, workers are classified as employees. This classification allows them to earn a wage or salary, typically obtain benefits, and requires that employers withhold a portion of pay for tax purposes. However, workers classified as independent contractors may have greater control over the terms of their employment. However, many employers and independent contractors do not really understand what really makes a person an independent contractor in the eyes of the law.
Are you an independent contractor?
You may feel uncertain whether you fall into the category of an independent contractor. It may help you to know that the following terms could also refer to this type of worker:
- Project worker
- Contract labor
- Contingent worker
- 1099 worker
- Per diem
When you applied to work for a company, any of these terms could have been included in the job description. You may also have signed a contract giving details regarding the terms of the work. However, that may not necessarily mean you are actually an independent contractor.
Have you been misclassified?
Some employers may call their workers independent contractors and treat them as such out of ignorance, but those workers may not really fit the legal definition of contractors. Other employers may use this classification because they do not want to handle taxes, provide employee protections or deal with other obligations that come with having employees.
You may think that misclassification does not affect you much because you still receive payment for your work. However, you may be missing out on benefits, wages, and overtime pay. You may even have to pay employment taxes that your employer should have paid. Overall, misclassification of employees causes considerable issues and often violates wage and hour laws.
What can you do?
If you believe that you have been improperly categorized as an independent contractor when you actually meet the qualifications of an employee, you may need to discuss the situation with your employer. If don't get straight answers, you may want to consider taking legal action. Wage and hour law violations are serious issues, and filing a lawsuit may be your best option for obtaining the compensation you deserve.