Independent Contractor Misclassification
You work only for one employer. You have to report to work at the time he tells you to. You can’t leave work until the time he says you can. You use his tools or offices, not your own. He tells you the way in which you have to do the work. You don’t make a profit, you just get what he agrees to pay you for the time you work. He even makes you sign an agreement that you are an independent contractor, when in reality you are just working for him like any other employee. And because you are a supposedly an independent contractor, your employer feels free to not pay you minimum wage or overtime. But he isn’t free to do that under Federal and New York Law.
Genuine independent contractors are a small proportion of the workforce. Nevertheless, it is in the interest of employers to pretend you are an independent contractor (and not an employee) and give you a 1099 Form instead of a W-2 (or no tax forms at all), because they use this to avoid paying minimum wage, overtime, and the employer’s portion of social security and medicare taxes. And of course, they think they avoid including you in their pension and health plans, or paying unemployment or workers’ compensation insurance. So, there is a lot of incentive for employers to cheat in this area. But real independent contractors can set their own prices, make a profit, serve more than one client, and establish themselves as a business, with their own business location, business cards and the like.
Courts in New York use an economic reality test to see if you are really an independent contractor. How much control does the person who pays you have over you as a worker? - who sets the work schedule, do you have to tell them you will be absent, do you have to follow their rules and regulations, do you have to follow their directions about how to do the work, do you fill out time sheets or reports about your duties, do they subject you to discipline. Do have the opportunity for profit or loss? - did you make an investment in your own work tools or workplace, did you work full time, did you have the ability to work for others? How much skill is required in the work you perform? How much time do you work for the person who pays you? To what extent are you part of the business of the person who pays you and could they do their business without you and others similar to you? The analysis must answer the ultimate question of whether you are really in business for yourself or do you depend on another business (your employer) to perform your work.
Employees are often shortchanged when their employer pretends that the employee is supposedly in business as an independent contractor. Federal Law and New York State law do not permit minimum wage and overtime violations just because your employer calls you an independent contractor, when the reality is that you are actually an employee. Nor can your employer subject you to retaliation in New York State or New York City because you complain that you are not being paid minimum wage or overtime the way any employee should be paid.
Contact us online or call us at (212) 949-1001 if you think that your employer's harmful actions stem from misclassifying you as an independent contractor and not paying you minimum wage and overtime when the reality of the situation is that you are an employee and not in business for yourself. We will use our more than 25 years of experience to help you resolve the matter by negotiation or by going to court in the State of New York or New York City.