As an employee in California, there are certain advantages afforded to you under California employment laws.

If your employer misclassifies you as an independent contractor, you are being denied access to employment benefits such as pension plans, health insurance, workers’ compensation, and various other protections.

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Even as a full-time employee, there are still ways that your position with a company can be misclassified. If you receive a “promotion” from your employer to a managerial position, but all of your job responsibilities stay the same then you may be a victim of misclassification that can lead to unpaid wages as a result of losing your overtime pay.

At Ghozland Law Firm, we believe in fighting for employee rights. If you believe that you are a victim of misclassification, contact our office to learn the legal actions you can take today.

How to Know if You Have Been Misclassified

Employee Misclassification is a widespread issue in the state of California. Its occurrence can be a company’s way of saving money by cutting corners or can be purely accidental. The best way to understand misclassification is by evaluating the employee-employer relationship.

When an employer has more control over the freedom of an employee then most likely they are not an independent contractor. For example, if an employer can dictate the way you dress or your attitude then it is likely that you are an employee not an independent contractor.

What is an Independent Contractor?

An independent contractor is a self-employed individual who provides goods and services to an entity or individual under contract with terms and conditions. The scope of an independent contractor is best understood through the control they have over their workload. Independent contractors are able to set and negotiate their rate, determine their schedule, and decline a work assignment.

Although the independent contractor status allows for more freedom, the downfall lies within the lack of protection afforded to workers that are not considered employees. For example, an independent contractor pays for businesses expenses, a healthcare plan, and assumes risk for any and all profit loss.

In order to provide further clarification when determining classification the California Supreme Court implemented a system known as the ABC Test. A worker is considered an employee rather than an independent contractor, unless all three of the below conditions are met:

  • A. The worker is free from the direction and control of the hiring entity with respect to work performance, both under the contract for the performance of work; and
  • B. The worker performs work outside the usual course of the hiring entity’s business
  • C. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed

If you feel as though you have been misclassified through a “promotion” to a position in management that does not involve any new job responsibilities, then you are being denied payment for any hours of overtime work.

Why Employers Misclassify Employees

Misclassifying an individual in the workplace is a serious violation to California employment laws. Although misclassification of an employee can occur accidentally, often times it is a result of a company trying to cut costs. The costs that companies are able to avoid by misclassifying are, but not limited to:

  • Contributing to unemployment insurance
  • Retirement plans
  • Healthcare plans
  • Medicare
  • Workers’ compensation
  • Social security
  • Overtime Wages
  • Business reimbursements
  • Income Tax Withholdings

When a company misclassifies an employee it not only considerably reduces compensation, but it also denies funds needed by the government for public benefits like Social Security and Medicare. If a company violates workers rights by violating the protections provided by California labor laws, they may face various fines and even sometimes jail time.

What To Do If You Have Been Misclassified

If you feel as though you have been misclassified in the workplace, the best course of action is to reach out to your employer and provide them with a detailed explanation of the misclassification you have been subjected to.

If your company responds to your request with an unsatisfactory decision, then the next step is to involve the IRS. In order to determine your employment status it is important that you file the IRS form SS-8 for federal tax purposes. Once the IRS receives these forms, they will reach out to your employer to understand their account of the facts. From here the IRS will determine the status of your employment. It is important to note that the IRS, during the process of discovering your employment status, may disclose your identity to your company.

If you feel as though you have been denied compensation due to misclassification, there are two ways to pursue monetary damages:

Individual Lawsuit: A lawsuit filed by a single plaintiff for their own benefit to address accusations of misclassification.
Class Action Lawsuit: A lawsuit filed by an individual or a group of plaintiffs on behalf of a collective with a common employer to address accusations of misclassification.

Hold your employer accountable for violating your worker’s rights, contact Ghozland Law Firm today.

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    When an individual hires us, our team works hard to provide the best possible and settlement possible for their case. We work closely with our clients to ensure that they are given the ability to recuperate from their injuries, while we handle the legal side of things. Our firm operates on a contingency fee basis, which means there is no fee until we receive a favorable outcome for your case. Our firm also proudly provides free case evaluations to all potential clients, which we encourage you to fill out as soon as possible.