Your Label as an “Independent Contractor” May Be an Illegal Technique to Underpay You
What is the difference between an independent contractor and an employee? The definition of an independent contractor in New York is a self-employed individual who operates her own business and is independent from the customers for whom she provides goods or services. An employee, in contrast, does not own her own business, but rather works in a business owned by other people and is therefore dependent on that separately-owned business for her wages, benefits and general working conditions.
The distinction between independent contractors and employees matters because most legal protections – including state and federal minimum wage laws and Fair Labor Standards Act (FLSA) overtime protections – protect only employees who are employed by an employer. Independent contractors have no employment protections at all, even if they are paid less than minimum wage or not paid at all. It is hardly surprising that many employers try to sidestep their obligations by classifying workers as independent contractors.
How Do I Determine If I Am an Independent Contractor?
In New York, the courts will often use the “economic realities” test to decide whether you are an employee or an independent contractor, looking at the following factors:
- Whether the worker is subject to the control of the person for whom the work is provided.
- The worker’s opportunity for profit or loss and their investment in the business.
- The degree of skill and independent initiative required to perform the work.
- The extent to which the work is an integral part of the employer’s business.
- The permanence or duration of the working relationship.
The ultimate question when determining if a worker is an employee or an independent contractor is whether you depend upon someone else’s business for the opportunity to render service or you are in business for yourself.
Does it matter if I have signed a written agreement stating that I am an independent contractor?
Not really. What matters is the true economic reality of the relationship. Likewise, the fact that you may have been issued a 1099, rather than a W-2, is irrelevant in determining whether you have been misclassified as an independent contractor.
Industries That Frequently Misclassify Employees as Independent Contractors
Wrongful misclassification of employees as independent contractors is common in the following industries: media (especially regarding writers or reporters classified as independent contractors), technology companies, cable television installation companies, janitorial firms and construction companies.
If you are wondering whether you have been misclassified, call the experienced New York employment law team at Braverman Law today at 212-206-8166 or contact us online today to schedule an appointment. We can tell you if you are an employee or an independent contractor. Se habla español