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Independent Contractors and Misclassification

With the New Year beginning many employers are gearing up to hire new workers. Many of these new jobs will not be made under traditional employment relationships because employers are seeking ways to reduce overhead costs in the continuously struggling economy. The most common way for an employer to reduce their staffing costs is by contracting out for services by using independent contractors. However, many employers unfairly mislabel workers as independent contractors to avoid payroll taxes, overtime, and break requirements. With the Affordable Care Act’s employer mandate around the corner in 2015 most employers are tempted more than ever to state that their workers are independent contractors. However, independent contractors have rights as well, and those rights are not limited by the mere fact of being labeled a contractor.

Independent Contractors Protected from Discrimination

Although independent contractors may not sue for discrimination under the Fair Employment and Housing Act (FEHA), many do not realize that the Unruh Civil Rights Act protects contractors from being discriminated against on the base of disability, race, age, genetic information, religion, sex, martial status, nationality, ancestry, color, sexual orientation, and similarly related personal characteristics. In fact lawsuits brought under the Unruh Act may be more freely prosecuted because unlike FEHA claims, which require a right to sue letter to be granted, Unruh Act claims may be plead without filing a charge with the Department of Fair Employment and Housing.

Independent Contractors Not Protected by Fair Labor Standards Act

When it comes to pay independent contractors are not protected by California or federal overtime, minimum wage, and payroll standards. However, to determine whether a worker is an employee or contractor an employer must perform the economic realities test. The 8 factors of the economic realities test are:

1) Whether the worker is engaged in a distinct business

2) The level of supervision given to the worker

3) The level of skill required

4) Whether the worker supplies the tools and place for work

5) The time it takes to perform the services

6) The method of payment

7) Whether the work is part of the regular business of the employer

8) Whether the parties believe an employer-employee relationship exists.

 

The basic gist of the test is that the more control the employer has over the worker and the more the worker is vital to the employer’s business, the more likely it is that the worker is an employee.

Employment Law Expertise

If you have been misclassified as an independent contractor or discriminated against by your employer contact the Law Offices of Michael S. Cunningham. Our seasoned employment attorneys can provide you with a case evaluation to help you determine your best legal options. Call (858) 376-7390 today.

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