As an employee, there are laws in place that look out for your interests, from minimum wage to overtime pay. However, these laws do not cover independent contractors, and if your employer wrongly categorizes you, it may deny you important benefits and legal protection.
Unfortunately, many workers are unaware of their status and assume that as long as they are getting paid, they are employees. It’s not always the case.
How can you tell that you’ve been misclassified?
It is necessary to understand the difference between an employee and an independent contractor. To do this, you need to ask yourself the following questions.
- Are you running your own business or working for someone else? If you are working for someone else and doing daily tasks as opposed to bringing your own crew to do specific tasks, you are likely an employee.
- Are you paid hourly, or do you receive a salary? Employees receive regular wages while contractors get paid for work done or upon completion of a project.
- Are you dependent on your employer to do the job? Unlike independent contractors, employees require their employer’s tools and equipment to do the job,
- Does your employer decide how and when you need to work? Usually, independent contractors have some degree of freedom since they decide how and when they work.
Defining whether or not you are an employee or independent contractor largely depends on the working relationship with your employer.
What happens if you have been misclassified?
There is a lot you are likely missing out on if you have been misclassified as an independent contractor. You could be owed money in overtime pay or missed wages.
The first step you ought to take is to raise the issue with your employer and see if they can review your status. If that does not work out, it may be time to involve the IRS or even take legal action against your employer. You deserve fair pay for work done, and you should do everything to safeguard your rights.