Under federal law, there are two primary kinds of paid workers: employees, and independent contractors. And whether intentionally or accidentally, employers are mixing up the two, to the detriment of their own workers. Being misclassified can have major financial and legal implications to an employee, and it’s important to know what to do if you think you’ve been misclassified.
Broadly speaking, the major difference between an independent contractor and an employee is how much control the employer has over the worker, and how much responsibility they therefore have for the employee’s actions. Employees are strictly controlled, but employers are responsible for their actions if they do something legally actionable as part of their job; independent contractors are more-or-less outside the employer’s control, but the employer is also not responsible if the independent contractor does something illegal on the job.
However, there isn’t a strict set of criteria for determining whether someone is an employee or an independent contractor. Instead, when there’s a dispute over whether a worker should be considered an independent contractor or an employee, there’s a set of factors that are measured as a whole and weighed against one another to come to a determination. You can read more about those criteria here.
Aside from liability for the employer, a worker’s classification has other major implications. For example, an employer must withhold Social Security taxes for an employee and must pay into workers’ compensation for all their employees. They have no such obligation for their independent contractors, and additionally, independent contractors must pay their own Social Security taxes. Sometimes, the way an employee finds out they’ve been misclassified is they get a notice from the IRS indicating they owe thousands in unpaid taxes.
If you’re uncertain about whether you’re classified as an employee or an independent contractor, check to see your employer’s W-3 forms, which they should have for every employee on staff. If you believe you’re an employee, there should be a W-3 indicating it, along with the W-4 you filled out when you were first hired. If there isn’t, you may need to hire a lawyer to sort things out.
If you are in a dispute with your employer over your employment status or want to protect your rights as an employee or independent contractor, give the Law Offices of Steve Sack a call. Steven Mitchell Sack, the Employee’s Lawyer, is a New York employment lawyer who has considerable experience in handling the many aspects of employment law, including overtime, tips and gratuities, minimum wage, unemployment benefits, and disability matters. To schedule a consultation with New York City employment lawyer Steve Mitchell Sack, call (917) 371-8000.
