Salary misclassification (calling an employee an independent contractor or vice-versa) is a serious problem in California. This guide answers all your questions about salary misclassification.
Frequently Asked Questions About Salary Misclassification in California
Have a look at these frequently asked questions about salary misclassification in California. If you don’t see the answer to your question here, please call our office at 818-230-8380 to ask during a free consultation – we’ll be happy to give you the guidance you need.
- What is salary misclassification?
- What is an exempt worker?
- What is a nonexempt worker?
- What is an independent contractor?
- How do you know if you’re an employee or contractor?
- What happens if your employer misclassifies you on purpose?
Here’s a closer look at each.
What is Salary Misclassification?
Salary misclassification occurs when an employer says that you’re an independent contractor when you perform the work of an employee (or vice-versa), or when an employer says you’re exempt from labor law protections when you shouldn’t be. Sometimes it’s unintentional; employers aren’t always clear on the law. However, in some cases, it’s intentional and employers misclassify employees in an attempt to avoid paying overtime or providing vacation time or other benefits, or to pay less money in taxes.
What is an Exempt Worker?
Exempt workers are workers who aren’t protected by the California labor laws that protect most employees, such as those involving overtime pay, breaks and discrimination in the workplace. In order to qualify as an exempt worker, employees generally must be filling an administrative, executive or professional role. Usually, these roles involve supervising other employees, allow a worker to exercise discretion in performing the job, and performing managerial duties.
What is a Nonexempt Worker?
Nonexempt workers are those who are entitled to protections under California labor laws that involve overtime, breaks and other issues. Most employees are nonexempt, which means they are entitled to overtime pay, meal and rest breaks, and even unemployment compensation when their employment is terminated.
What is an Independent Contractor?
An independent contractor is a person who works on projects for an employer but isn’t held to the same requirements as an employee is. Independent contractors don’t have the same benefits, either. Generally speaking, an independent contractor undertakes a contract to provide materials or labor, or to perform a service or do a job – not someone who gets hired to show up at a certain time every day.
Independent contractors generally:
- Set their own hours
- May work from any location
- Are ineligible for employment benefits (like health insurance, overtime pay or sick pay)
- Are responsible for the costs of performing a job
- Cannot claim unemployment or worker’s compensation benefits
- Receives pay according to their contract’s terms and conditions
- Work under the employer’s control as far as time, place and number of hours
- Are eligible for employment benefits (like health insurance, overtime pay and sick pay)
- Do not come out-of-pocket for the costs associated with performing the job
- Are subject to an employer’s guidelines and rules on performing tasks
- Can usually only be terminated for good cause and with notice
- Are protected by employment laws involving discrimination and workplace safety
How Do You Know if You’re an Employee or Contractor?
In the state of California, no matter what your employer tells you that you are, your actual duties and conditions of employment determine whether you’re an employee or independent contractor. If your actual work looks like what an employee performs, you’re an employee; if it looks like the conditions under which independent contractors work, you’re an independent contractor. This can be pretty complicated, so if you’re not sure, your best bet may be to talk to a Los Angeles employment attorney.
What Happens if Your Employer Misclassifies You on Purpose?
Unfortunately, some employers misclassify workers on purpose. They may do so in an effort to avoid paying overtime (or to otherwise save money) – but no matter why they do it, it’s against the law. If you suspect that you’re misclassified, you may want to set up a consultation with an employment lawyer; your attorney can let you know whether you have grounds to file a claim against your employer.
Do You Need to Talk to an Attorney About Salary Misclassification?
If your employer has misclassified you, you could be entitled to compensation. For example, if you’re misclassified as an independent contractor and have been missing out on benefits that employees receive, you could be entitled to claim them. The best way to find out whether you’re entitled to compensation, such as back pay, accrued leave, overtime pay or anything else, is to speak to an attorney.
Call our office at 818-230-8380 or fill out the form below to schedule your free consultation now. We can give you the guidance you need on salary misclassification and more.