Legal Question in Employment Law in California

Re: Contract Labor Limitations

While it appears under IRS rules and worker's comp guidelines that you are an employee, many more questions must be answered to determine whether you are an employee or independent contractor. If you are an employee, they have already violated the law. Call to discuss 800-685-6950

Re: Contract Labor Limitations

There are certain tests that are looked at to determine whether you are legally an employee or an independent contractor. Companies cannot simply consider you an independent contractor just because it is convenient or cost efficient for them.

The most important test is the right to control the work you do. If you work full time for this company, and have no independent discretion on how you do the work, the hours you work or the tools you use (especially if provided by them), that is a strong indication you have been misclassified. There are serious penalties that may be imposed against employers that misclassify employees with EDD, the Workers' Compensation Board, and other agencies, as well as remedies available to you.

You should schedule an appointment with a labor law attorney in your area to determine if you truly are an employee of this company and, if so, how to approach the situation.

Re: Contract Labor Limitations

I concur with the other answers you received, but I thought I'd offer a little more detail.

An independent contractor is somebody who exercises significant independence and who is subject to very little control over where, when and how they perform their duties. An employee, by contrast, is somebody who is subject to the direction and control of somebody else (employer) who tells them the manner in which to perform the work and the results to be achieved.

If you are really an employee, you may or may not have a right to benefits, depending on how the various ERISA plans define "eligible employee". It is possible that they could still have written the plans in such a way that you would still be excluded, but very often, successfully arguing for employee status can create retroactive benefit entitlement, as well as entitlement going forward. Nothing could be concluded for certain without reviewing those plans. But, I often find that employees mischaracterized as independent contractors would be covered by pension/401(k)/health, etc. if they could just beat the independent contractor characterization.

To determine these potential entitlements would require a detailed review of not only your exact working relationship, but of those plans as well. There are procedures spelled out in federal law how you can obtain copies, even if they dispute your employee status.

This is also a common tax evasion device. By characterizing you as an employee, the employer avoids the employer portion of the social security/medicare tax. You pay the self-employment tax, which is substantially higher than an employee's portion of the social security/medicare tax. So, you can get shafted on this to the employer's benefit, although you do have more potential tax deductions.

If you need more help, e-mail me at [email protected].

Re: Contract Labor Limitations

You may illegally be classified by your employer, entitling you to file a wage claim. Contact me if interested.