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My Employer Misclassified Me as an Independent Contractor—Now What?

independent contractor agreement on a clipboard surrounded by office supplies

Take immediate action to protect your rights as an employee

One consequence of the rise of the "gig economy" has been an increase in independent contracting. There's nothing wrong with that per se, as many workers — from tradesmen to freelance writers to white-collar consultants — earn a good living as independent contractors. The key is that these people take advantage of the tradeoff at the heart of independent contracting: they're responsible for their own taxes and benefits, but also enjoy greater freedom and flexibility.

However, quite a few "independent contractors" are actually no such thing. They are employees misclassified as contractors — and that can be catastrophic. If you believe your employer has misclassified you, then you may have legal recourse.

Understanding the legal requirements to be an independent contractor

An employer can't just say you're a contractor to avoid taxes or benefits. Broadly speaking, you are an independent contractor if you are in business for yourself, and you are an employee if you work for someone else's business and they exercise control over your work.

Unfortunately, there is no single test for whether someone is an employee or an independent contractor, and federal and Ohio law differ somewhat on the issue. However, some of the questions to ask in this determination include:

  1. Does the employer set specific hours or a specific location for your day-to-day work? It's one thing if they ask you to attend a few meetings at a specific time and location, but if they're requiring you to work in their office during specific hours day-in and day-out, that's a sign that you are likely an employee, not a contractor.
  2. Does the employer control the details of your work process? Do they require you to use specific tools or equipment, or direct you where to purchase supplies and services? That level of control of your work is usually associated with employees; independent contractors usually use their own tools and methods as long as the work gets done.
  3. Are you free to seek out other business opportunities or advertise your work to other companies? A truly "independent" contractor is usually allowed to do so.
  4. Does the employer give you training and/or formally evaluate your work? While it's not unusual for contractors to get informal input and feedback on their work, if the level of training or evaluation is on par with an employer-employee relationship, you might be misclassified.

In plain English, if you're called an "independent contractor," then you should be meaningfully independent: free to set your own schedule, engage multiple clients, and control the details of how your work gets done. If a company treats you as an employee, then there's a good chance you are an employee and legally should be treated as such. However, ultimately, only an attorney can assess your situation and determine whether you should be classified as an employee or an independent contractor.

The cost of being misclassified can be quite high

If you're misclassified as an independent contractor, the effects on your income can be substantial. Contractors are exempt from minimum wage and overtime laws, pay their own Social Security and Medicare taxes, and don't get benefits such as health insurance and workers' compensation. Independent contractors also lack several important legal protections that employees have, such as anti-discrimination laws and protections for union organizing.

That's why, if you suspect you're misclassified as an independent contractor, your first step should be to call an attorney. That doesn't mean you'll have to file a lawsuit or go to court; it means you'll get clear answers from someone who knows the law and understands your rights and options. If you believe you're misclassified, contact Nilges Draher LLC for a confidential, no-obligation consultation.

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