Independent Contractor or Employee?
A question that comes up often in my cases is whether an employee who is being treated as an independent contractor by his or her employer is correctly categorized as such or should instead be treated as an employee?
Is this really important? Yes. It is.
If an employer has mischaracterized an employee as an independent contractor, then the employer likely has not paid the correct amount of employment taxes on that individual. Instead, that tax burden has been improperly shifted onto the employee. Additionally, independent contractors are not entitled to overtime pay. Thus an employee who has been mischaracterized may be entitled to between 2 and 3 years' worth of unpaid overtime. That can add up to a lot of money.
This week, AP Business Writer Joyce Rosenberg has an excellent piece describing the basics of this issue and discussing some of the fundamental differences between the two categories. You can find it in today's San Antonio Express News. I would encourage you to check it out.
If you believe that you may have been mischaracterized yourself or if you are an employer that has questions about this issue, then I encourage you to seek the counsel of a Board Certified Employment Lawyer in your area.
Services must be rendered personally. An employee does not engage other people to do the work. Contractors are able to assign their own workers to do the job.