Many people who work at various non-exempt jobs may be misclassified as independent contractors rather than as full time employees. Non-exempt refers to jobs where employees are usually paid an hourly rate not less than California’s minimum wage. The person who is paid for work by the piece or project or who is an independent hire can be misclassified to the employer’s advantage.
Based on the arrangement, the employer may not have to pay the independent employee overtime or bonuses. They may not have to deduct payroll taxes, provide healthcare benefits, and even standard breaks. The misclassified worker does not receive unemployment benefits when the job ends. The person is usually not eligible for worker’s compensation, family leave, vacation time, and other paid benefits.
Many employers consider independent contractors temporary employees. They may be “temporary” for several weeks, months, and even a year or more. They may be hired for special projects that extend way beyond the timeframe discussed in the original project’s plans.
The employee may also be required to punch a time clock on the job or sign into a timesheet on a computer. Overtime pay must be given to these employees if they work more than eight hours a day or 40 hours a week under California laws.
Other people are actually employed by an agency that provides office personnel, construction workers, programmers, and educators on a temporary basis. The job is for a specified amount of time and pay rate. The temp employee is paid by the temporary employment agency that charges the employer more than what the employee is actually paid.
The temp employee of an agency is usually a person with a skill set who agrees to the terms of working for the agency. This may include some benefits offered by the temp agency if the employee works on a steady basis. Many temp agencies try to place people in permanent full-time positions. They receive a fee for this, usually from the employer.
On the other hand, the potential full-time employer may prefer to continue to use the employee on a temporary basis for months or even years. The employer pays the agency and does not have to offer benefits. The temporary employee may be written off as a miscellaneous business expense. This can create the issue of misclassification, even fraud, if the employee does not receive benefits from the employer or the temp agency for long-term work.
A person may be hired directly by an employer to produce piece work. A construction worker may be hired to do a job for one project and paid on the basis of work completed. This is an independent contractor who should have a specified contract before beginning work. The contract or agreement specifies the type of work and the amount to be accomplished in a given time period along with payment. The agreement should also specify benefits such as break periods and any compensation for injuries that occur on the job.
Overtime payment should be included in the contract. The employee may also be required to punch in or sign in to a time clock device. The employee may be misclassified if he or she is working beyond the time specified in the contract without adequate pay and benefits.
Freelance, Outside Sales, and Commission Personnel
Some people may freelance for a project for a limited time. Sales professionals may agree to work on a commission structure or pay a percentage of outside sales to a company that furnishes leads and other information. These people are considered self-employed and responsible for their own taxes and insurance. They do not qualify for benefits.
Some employers may take advantage of commission sales people by insisting that they spend time in the office or showroom. The employee may be asked to do work that cannot result in a commission, and they are not paid for the time spent in this position. This is illegal under California law.
Contact us at Aiman-Smith & Marcy if you believe that you are misclassified and eligible for full-time benefits, overtime pay or unpaid commissions. We focus on consumer fraud and class action suits in violation of California employment laws.