Am I an Employee or an Independent Contractor? - Aiman-Smith & Marcy
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Employee vs. Independent Contractor

Employee misclassification is the practice of employers not classifying their workers as employees but as independent contractors. 

Employee misclassification is one of the worst issues that affect workers. In addition to workers being deprived of important entitlements, such as the minimum wage, pay for overtime and other benefits, they’re also denied medical leave and a safe workplace.

An independent contractor is free to work with other clients. They are free to set their own schedule and to work independently. A contractor may be able to choose whether they come into the office or work from home. And — we might add — has a contract with binding agreements on both sides for employer and contractor responsibilities.

If your employer makes you clock in, if they micromanage your work, and if they get to decide when you work extra hours, you’re not a contractor. You’re an employee and therefore are legally required to be paid as an employee. 

The main test to determine whether someone is an employee or an independent contractor in California is whether or not the principal has the authority to control and direct how work is done. The IRS has developed a checklist of 20 factors, which are listed on their 4600 IRS manual.

Here a few job types where employees may be misclassified as independent contractors:

  • Cell site technicians
  • Alarm, security, or cable installers
  • Truck drivers
  • Information technology representatives
  • Temporary staff
  • Construction staff


Exempt vs. Nonexempt Status

It’s important to know the difference between an exempt and nonexempt status. Basically, exempt employees are paid a salary that is intended for fully covering all the hours they work each week. In other words, employees are not compensated based on how many hours they work and don’t receive overtime pay.

Generally, nonexempt employees are paid by the hour. These employees receive overtime pay, according to the appropriate overtime rules.

However, not all salaried employees are exempt.  Employees must fit one of the following criteria in order to be correctly classified as exempt: executive, administrative, professional, outside sales, inside sales, or computer professional.

To determine whether an employee is correctly classified, rate of compensation as well as duties and level of authority must meet certain established criteria.  As an exempt employee, because of your duties and level of authority you are exempt from overtime provisions of the Fair Labor Standards Act (FLSA). You may have more flexibility in your schedule than hourly employees in your company, but you likely are expected to work whatever hours are necessary to accomplish your job.

Call Aiman-Smith & Marcy at 510-817-2711 if you believe you have been misclassified. Our attorneys can help you with your questions and concerns.

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