I made a post months ago complaining about my job and through some very supportive people in the comments (thank you!) discovered I was being misclassified as an independent contractor and I was actually an employee.
I recently just came across another post where someone else is also probably being misclassified so I wanted to make a post about some things I’ve learned so hopefully you don’t get taken advantage of. Disclaimer: I am not a lawyer and this only applies to US residents.
- Companies do not get to decide whether or not you are their employee. The relationship you have with the company determines whether or not you are an employee.
- If you are an employee, even if they said you’re not, you are still protected by employment laws. This includes wage laws, wrongful termination laws, taxation laws, etc. If you talk to your employer about being misclassified, they cannot legally fire you for bringing up those concerns. They also cannot legally fire you for talking to your coworkers about being misclassified (or talking about wages for that matter). Just because it’s not legal doesn’t mean they won’t fire you though, so be careful and make decisions that are right for you and your situation.
- There is no set rule that determines your employment status, but it does depend on the “economic reality” of your relationship to your employer. You have to be economically independent of the company to be an independent contractor. So, are you truly independent from the company? Are you able to service other clients outside of the company? How much freedom do you actually have to do the work? Who sets your schedule? Who sets your pay rate? Who is paying for the equipment you use? Are you providing work for the company that is core to their business mission? How you answer a variety of these questions will determine your employment status. If you’re questioning it, talk to the DOL, IRS or a licensed employment lawyer. But I can say that just being able to set your own schedule is not enough to qualify you as a contractor. What your pay is based on (hourly, salary, commission) also does not solely determine your employment status.
- If you are being misclassified, keep track of your hours (all hours worked for the company, not just the ones they deem “billable”) and make sure you’re being paid minimum wage and overtime. If you’re not, you can have the DOL Wage and Hour file a claim against the company so you can get your wages (it’s probably best to contact your state wage and hour division since the minimum wage might be higher) or you can contact an attorney.
If you think you’re being misclassified, my advice would be to find an employment lawyer in your state and set up a consultation call. Most of them will do it for free for these kinds of cases. They’ll be able to tell you whether or not they think you’re being misclassified and what you can do about it. Sometimes you’ll be able to get lost wages/benefits. Either way, you can always report the company to the DOL and IRS if you’re feeling froggy.
I hope this was helpful! Don’t let them take advantage of you.