Employee misclassification occurs when employers of labor decide to categorize their employees as independent contractors with or without the intention of excluding them from enjoying significant benefits that belong to the people as employees. From the employee to the state, there appears to be no end in sight to the ugly consequences that come from employee misclassification. So, if you come to realize that your employer has been denying you what you feel you’re entitled to simply because they misclassified you, this piece is certainly for you.
At times though, it is possible that your employer has classified you correctly. In that situation, you’ll be wrong in law to bring an action against him for employee misclassification. This is a good example of why you need to consider what forms the basis for bringing a cause of action for misclassification, or better yet – contact a lawyer specializing in labor and employment cases.
As it were, against popular opinion, misclassification may not appear by way of employee vs. independent contractor. Under the state and federal overtime legislations, most employers wrongly classify their employees as “exempt” employees. Oftentimes, as a result, they end up denying their employees their overtime pay.
Independent Contractors
Much like employers do for employees, they also have distinct duties to self-regulating contractors. Normally, it is difficult to distinguish between the two, the courts in California have set aside a detail of factors to specify whether a person is an independent contractor or an employee and which includes some study of:
- Who directs the means and manner of the performance of the worker’s duties?
- Whether the individual engages in a different occupation or business.
- The skillset needed to finish the job of the worker.
- Whether the job is finished under supervision.
- Can the individual be discharged for cause or at will?
- Whether the individuals feel that they have come into an employer-employee rapport.
- Who stocks the tools and materials of the workers?
- The skillset needed to finish the worker’s job.
Every working person who supplies their own tools, does their job on time, don’t execute tasks under supervision; are greatly skilled and oversee the manner their duties are carried out are more probable to be called autonomous contractors. On a different note, every working person who can be released at will, get payments by time instead of per task, take a substantial period to finish their obligations, and finish their work which is vital to another person’s business are more probable to be regarded as employees.
Protections and Benefits
The moment a worker is tagged an employee, they are covered by labor laws and are qualified for compensation benefits that accrue to workers.
In a bid to not spend revenue on taxes and insurance policies, some employers often claim that an employee is essentially an independent contractor. Due to this, an employee can be deprived of the enjoyment of important benefits as well as protections.
What’s more, a misclassified employee may be readily disqualified from enjoying unemployment benefits. If they get hurt while working on the job, they may be ineligible to get compensation as workers.
Again, they enjoy no right to sick pay, rest breaks, a minimum wage, or overtime pay. As employees, they may also be ineligible for health care coverage and they may have to pay all Medicare taxes and social security on their own.
Exempt Employees
The California Fair Employment and Housing Act provides that overtime wages to non-exempt employees. Notwithstanding, usually, certain persons may not be properly categorized as exempt workers and otherwise don’t get overtime payments to which they are payable.
In California, under the law, exemptions ranging from legal compulsory minimum wage and overtime requirements are barely understood. The exemptions identified under the law in California relate to:
- Administrative Exemption
Excepted from both minimum wage and overtime regulations of California law.
- An employee under this category needs to earn a monthly salary equal to nothing less than twice the state minimum wage for a full-time engagement.
- Employees who fit this requirement are normally exempt as per the administrative exemption.
- The carrying out of official work associated with management policies or comprehensive business operations of their employer or the customers of their employers.
- The carrying out of functions in the administration of a school organization, or an educational system, or of a department thereof, in work closely linked to the intellectual training or instruction performed there.
- Who normally and constantly uses independent judgment and discretion, or
- who constantly and openly helps an owner or some employee engaged in a bona fide administrative or executive capacity, or
- who carries out, under exclusive general control, work along technical or professional lines demanding special experience, training, or knowledge, or
- who implements, under exclusive general control, certain tasks, and assignments, and
- who is majorly involved in responsibilities that meet the requirement for the exception.
- Executive Exemption
Exempted from both overtime and minimum regulations of California law.
- An executive employee may need to net a monthly income equal to nothing lesser than twice the state minimum wage for full-time engagement
- As recommended by the Office of the Labor Commissioner, employees who fit this requirement are usually exempt under the executive exception and are seen as employees
- Perform major duties that involve enterprise management, or of a customarily identified subdivision or department.
- Exercise great judgment and discretion constantly in the performance of their responsibilities.
- Professional Capacity Exemption
Spared from both overtime and minimum wage provisions of California law. The requirements that obtain under this exemption can be found under administrative exemption too. However, it features the demand for higher levels of mental, intellectual, physical, or artistic processes required for the completion of their tasks.
Any smack on the back for erring employers?
Employers that are found wanting of misclassification can be fined up to as much as $5000 – $20000 for each violation under the law in California. If any evidence of a series of intentional or willful misclassification is found, the courts won’t hesitate to fine such wanting employer to as much as $10k – $30k. Additionally, misclassified employees can put in for a claim against their employers for retrospective pay and other forms of denied compensation to which they are entitled.
If you feel you have been misclassified at your current or previous workplace, the best idea is to talk to an employment attorney as soon as possible.
At JLG Lawyers, you can contact our team of labor and employment experts every day from 9 AM until 9 PM and have a Free Strategy Session to discuss your case, without any charge.