Wage and Hour Employee & Worker's Rights
Misclassification of Employee as Independent Contractor
While California has cracked down significantly on employers and businesses trying to game the system, many cheating companies are still misclassifying employees as independent contractors. The reasons should be obvious. They don’t want to pay workers’ compensation benefits, sick pay, implement withholdings, and other administrative costs. Luckily, the law is on your side if you have been mis-categorized. If you were most misclassified as an independent contractor, you most likely were deprived of other numerous rights such as overtime premiums, meal and rest break premiums, sick pay, and much more. Contact our employment attorneys at Shalchi Burch LLP. Below is a very basic recitation of the relevant law applicable to determining whether you should have been classified as an employee.
You might think you are better off as an independent contractor rather than an employee. However, unless you are performing a certain type of work and making a certain amount, you are probably not. And, your status as an employee or an independent contractor may make a difference in how much you earn, and entitle you to other protections and benefits not provided to independent contracts. California’s wage and hour laws only protect employees, and only employees are permitted to go to state agencies to enforce certain laws. Employers are not required to pay their independent contractors according to wage and hour laws, and they do not need to purchase workers’ compensation insurance for them or pay unemployment or Social Security for them.
The law can be muddy in determining whether someone is an employee or independent contractor. The different laws and how they are interpreted by courts and agencies mean that someone could be considered an employee under one law and an independent contractor under another law. However, the labor code in most instances presumes that someone providing a service to another is an employee.
The presumption is rebuttable and typically requires the hiring entity seeking to avoid an employee classification to demonstrate:
(1) enough autonomy to show that the worker is free from the control of the hiring entity with regard to the work performance;
(2) the businesses are dissimilar in that the worker’s labor or services fall outside the usual course of the hiring entities’ business; and (3) it is the custom of the worker such that the worker is customarily engaged in an independently established trade, occupation, or business, of the same nature as that involved in the work performed.
All three factors must be present and the burden rests with the hiring entity.
If you have questions whether you may have been misclassified by your hiring company or boss, contact the wage and hour employment lawyers at Shalchi Burch LLP now.
Misclassification of Regular Employee as Exempt
Another sharp tack employers will utilize to try to save money is to take regular employees and call them “exempt”. California labor laws require most employers to follow certain rules—like paying overtime, tracking hours, and providing rest breaks. But some jobs are exempt from these requirements and employers can make the exempt employees work long hours without paying them overtime premium pay.
An exempt employee is someone whose job is not subject to one or more sets of wage and hour laws.
In most cases, there are three requirements to determine whether a worker is an exempt employee under California law. First, the courts will make sure the employee is being paid at least double the applicable minimum wage. Next, the court will make sure the employee is primarily involved in white collar duties such as administrative, or executive, or professional responsibilities. Finally, the court will require that the employee is able to exercise independent judgment and discretion in carrying out his or her job duties.
All three must be present and the burden rests on the employer to justify their characterization of the employee as exempt.
If they are wrong, the employer will likely owe the employee back overtime pay, premium pay of one hour for missed rest breaks, penalties or damages for inaccurate wage statements, late pay, and other possible claims.
If you suspect you have been misclassified as an exempt employee, or if your business is facing such claims, please contact the wage and hour employment lawyers at Shalchi Burch LLP today.