Employee Misclassification

Classifying workers as “independent contractors” can have major benefits for businesses. If you believe your employer has misclassified you as an independent contractor, a New Jersey or New York misclassification lawyer can advise you of your options. A company does not have to provide many basics to independent contractors that most employees take for granted. Overtime, meal break and rest break regulations do not apply to independent contractors. Employee benefits which may be provided to other employees, such as medical insurance, do not have to be provided. The “employer” is able to insulate itself from liability for the independent contractor’s actions. Companies also obtain certain tax benefits by classifying workers as independent contractors rather than employees, and do not have to provide workers’ compensation coverage – a significant expense for the employer – to these workers. According to a 2000 study by the U.S. Department of Labor, 10 to 30 percent of employers misclassify employees as independent contractors.

Misclassifying employees as independent contractors or “consultants” particularly impacts blue collar jobs, such as construction workers, day laborers, janitors, and security guards. These misclassifications also routinely occur in such areas as healthcare, technology, and agriculture. Most workers simply want to earn a decent income in exchange for their labor, and are unwilling to question the “employer’s” practices if it means putting their livelihood in jeopardy. Standing up for your rights against your employer requires courage.

Misclassification of independent contractors is coming under scrutiny from the federal government. Several bills have been proposed in Congress in recent years to close tax loopholes that are favorable to businesses. The Executive Branch is also pursuing misclassification issues. In 2006 New Jersey enacted the Construction Industry Independent Contractor Act, providing for civil and criminal penalties against construction employers who misclassify their workers. New York’s 2009 Construction Fair Play Act presumes that workers are employees unless specific criteria are met, and creates a Joint Enforcement Strike Force to help enforce the Act. As the public becomes more aware of these improper business practices, vulnerable workers gain leverage in obtaining fair compensation from their employers.

Lawsuits may be brought by employees who have been misclassified. These cases are very fact-specific, and depend largely on the amount of control the company has over the employee. In general, if a company only directs a worker to perform a certain task, but does not direct how the task is to be performed, the worker may be an independent contractor. But if the company provides considerable direction and control over how the work is to be performed, the worker may be an employee. In some instances businesses hire other companies to provide workers, but still exercise control over the manner in which work is performed. Sometimes misclassification cases can be pursued as class actions based on uniform misclassification practices. This can create leverage for employees, but it is not always the best way to obtain results in your case. In each instance, it is important to consult with an attorney regarding your potential claims.

Independent contractor cases can be difficult, and it is important to hire an experienced New Jersey or New York misclassification attorney. At Resnick Law Group, PC we have substantial experience handling misclassification cases. We have obtained favorable trial verdicts in many employment cases, and this trial experience helps us provide realistic advice on the value of your case and the prospects for success. We have offices in both New Jersey and New York. For a confidential consultation, call our New Jersey office at (973) 781-1204, or our New York office at (646) 867-7997.