Employee or Independent Contractor: A Distinction That Makes a Difference

man in business suit

JusticeNewsFlash.com shares a press release about a Google Hangout hosted by Eric Grover of Keller Grover LLP.  The release discusses the importance of properly classifying workers as employees or independent contractors and the factors involved in making the classification.  It states:

In determining employee from independent contractor, a primary consideration is whether the work involved is part of the regular business of the employer. As Grover explains in the Hangout: “If you own a store and you need the building painted, hiring a painter is not related to the regular business of selling out of the store, so that painter is an independent contractor,” Grover explains.

On the other hand, if the employer is a call center and it hires people to come in and handle those calls, that work would be directly related to the business, making it harder to argue that those workers are independent contractors.

Other factors that are considered include whether the worker has made any investment in the materials to do the job, such as brushes and drop clothes in the case of a painter. A call center worker, for instance, would typically be working with tools — a desk, a computer, a phone — provided by the employer.  So once again it would be harder to make an argument that the worker is an independent contractor, and not a regular employee.

The difference is crucial because, as Grover explains, a worker classified as an ‘employee’ would enjoy protections and benefits that independent contractors do not have, such as reimbursement for certain work-related expenses. Employers would also have to supply Workers’ Compensation insurance, pay payroll taxes, and meet any relevant wage requirements, such as paying minimum wage and overtime.

Given the additional costs that an ‘employee’ designation can mean for an employer, it is not surprising that some businesses will try to shift those expenses back to their workers, by classifying them as independent contractors.  The good news is that there are steps workers can take to remedy that situation.

“If a worker believes they have been misclassified, they can bring a private lawsuit to recover back wages and expenses that should have been paid by the employer,” says Grover, whose firm has offices in Los Angeles and the San Francisco Bay Area.  “Workers in California can also go to the Labor Commissioner’s Office and pursue a claim that way,” he adds. “Or, if outside of California, look to the federal Department of Labor for assistance.”…

Read the full story at  Employee or Independent Contractor: A Distinction That Makes a Difference 

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