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Sometimes the line between who is considered an employee and who is an independent contractor gets blurred. Many companies prefer to classify workers as independent contractors to avoid paying for workers’ benefits and insurance. Failing to properly classify workers, however, can come with severe consequences. Popular questions about worker classification and injury claims include:
There is not a specific description for an independent contractor, making them very hard to define. Instead, court interpretation and law enforcement decide who is really an independent contractor when injury and other claims arise. Generally speaking, an employee is a worker who:
If you have been injured and are concerned that you may have been misclassified, contact an attorney as soon as possible. With a quick, initial conversation, you may be able to determine whether you are truly an independent contractor or if you should be eligible for employee benefits like workers’ compensation.
Occasionally, an employer will misclassify workers on accident. He or she may be new and naïve about state laws regarding employee classification. However, many claims against employers are based on “willful” misclassification. If an employer should have reasonably been able to classify you as an employee and failed to do so, he or she is in conflict with the current laws in California and may be subject to strict penalties.
An employer who willingly misclassifies an employee may be trying to cut corners and keep more profit away from workers. By having independent contractors rather than employees, a company can avoid paying certain taxes and labor costs. Companies that utilize independent contractors do not have to pay social security or unemployment insurance to independent contractors. It also frees employers from paying a minimum wage or following equal employment opportunity regulations.
California has stiff penalties for any companies that misclassify their workers. Under Senate Bill 459, the state’s Labor and Workforce Development agency can fine employers for willfully misclassifying individuals $5,000-$15,000 for each violation. For any proven pattern of misclassification, the penalty may be increased to $25,000 for each violation. Any employer who is guilty of misclassification cannot deduct fees or other payments after a contractor has been reclassified.
Yes, you can still file a claim if you have been improperly classified. First, you will need to challenge your status as an improperly classified worker. Under California law, you will need to file a wage and hour claim against the employer with the Division of Labor Standards Enforcement to recover lost payments and determine your true employment status.
You may want to consult an attorney for this process. The claim will be evaluated by the Deputy Labor Commissioner who will make a judgment call for proceeding with the case. Once your status as an employee has been determined, your attorney can help you complete the next steps in securing compensation in an injury claim.