Employee Misclassification Lawyers in San Diego Representing Employees Wrongfully Classified as Independent Contractors in California
California’s Wage and Hour laws set forth important rules about minimum wage pay, overtime pay, meal and rest breaks, and other critical factors that an employer should observe for the benefit of the employees. But because wage and hour laws only apply to W2 employees and not independent contractors, some employers may willfully or accidentally hire someone as an independent contractor, which may constitute employee misclassification. Learn what you can do if you believe you have been misclassified as an independent contractor and see why seeking the help of an employment law attorney can make all the difference in your case.
What Are the Key Differences Between an Employee and an Independent Contractor?
In simple terms, an independent contractor is paid to perform a specific task and deliver a particular result while controlling how the job is completed. For example, a small business owner may hire a freelancer to build a website for their new store. The business owner paid $3000 for a 5-page website design project, and the freelancer promised to deliver the finished website in 3 weeks. The business owner has no control over how the web designer will accomplish this task. Furthermore, web designing is outside that individual’s scope of business, and the freelancer customarily builds similar websites for other businesses acting as an independent contractor.
On the other hand, if the business owner requires the web designer to work a predetermined amount of hours and use specific software and design processes to complete the task of building the website, that business owner retains control over how the final result will be achieved. If the individual performing the work has no control over how the final result is achieved and is expected to follow company guidelines, then that person is an employee and therefore is covered by wage and hour laws.
What Is Employee Misclassification?
Employee misclassification occurs when an employee is incorrectly labeled as an independent contractor. Workers are often misclassified by employers as independent contractors so that those employers are free from legal obligations that come with hiring an employee, such as withholding and paying payroll taxes, complying with minimum wage and overtime rules, or providing meal and rest breaks, for example.
This can negatively affect misclassified workers in many ways – from not receiving proper pay and meal breaks to being ineligible for workers’ compensation coverage, family leave, paid sick days, unemployment insurance, and even the right to organize, join a union and protect against employer retaliation. Willfully misclassifying an employee as an independent contractor could be considered fraud and result in severe consequences.
How Do I Know if I Have Been Misclassified as an Independent Contractor?
In California, the so-called ABC test is customarily used to help determine the status of workers, starting with the idea that all workers are considered employees unless their employer can assert that all of the following factors apply: (1) the worker is not controlled by the employer of the business and receives no direction from that employer; (2) the type of work that individual is performing is outside the hiring entity’s normal scope of business and (3), the worker is routinely engaged in an independently established trade, occupation or business of the same nature as the work performed.
If these factors are true for a particular worker, that worker may be classified as an independent contractor. Otherwise, the worker is most likely an employee. If you suspect you may have been misclassified as an independent contractor, consider the three factors of the ABC test and how they may apply to your situation, and reach out to an employee misclassification attorney to discuss your case.
Am I Entitled to Receive Damages Compensation as a Misclassified Employee?
Employees who have been misclassified as independent contractors may bring a misclassification lawsuit against their employer. The affected worker may seek compensation for a variety of damages depending on which wage and hour laws the employer has failed to comply with.
Some of the most common damages recovered in an employee misclassification lawsuit include overtime compensation and interest on any unpaid overtime hours, attorney’s fees, and payment of one work hour for every meal and rest break they did not receive. When the employee is able to receive compensation for unpaid hours along with interest, this is referred to as liquidated damages, which may be available in cases where the employer is determined to have acted in bad faith. The employee misclassification is proven to have been more than an honest mistake.
In addition, employers who are charged with willful misclassification, that is, knowingly placing an employee as an independent contractor to avoid wage and hour obligations, may result in the payment of a civil penalty of up to $25,000 for each violation. As always, it is best to discuss your case with an attorney to fully understand the type and amount of damages you may be able to receive.
Can My Employer Fire Me for Complaining About Employment Misclassification?
California employees are legally allowed to exercise their rights to file a complaint or report a hostile work environment without being the target of retaliatory actions by their employer. While California is an at-will state for employment, terminating an employee because that individual filed a misclassification complaint could be considered retaliation. The employee may be entitled to initiate a wrongful termination claim.
If you are concerned about your current work status and are contemplating the possibility of filing a misclassification complaint, your priority should be to make an appointment with a San Diego employee misclassification attorney to discuss your case. At Khosroabadi & Hill, San Diego workers can get the knowledgeable legal advice and representation they need to hold their employers liable for improperly classifying them as independent contractors.
Our legal team can help you build a strong case and maximize your chances of receiving compensation for all your unpaid overtime hours, breaks, and other financial losses you may have sustained as a result of the misclassification. Reach out to our office at 858-240-2093 to see how we can help you.