Courts look at several factors to determine whether a worker is an employee or an independent contractor. The most important factor is the employer’s right to control the worker’s manner and means of performing the job.
KEEPING labor costs down by taking unlawful shortcuts does not pay. One of these illegal shortcuts is to classify workers as “independent contractors.” Independent contractors are not employees and do not have the same rights and protections that employees enjoy.
Unlike employees, they do not have to be paid minimum wage, overtime, missed breaks, and other benefits. These benefits may include health insurance, retirement or pension benefits, and workers’ compensation protection. There are also no deductions for taxes and Social Security. Some companies pass on the costs of doing business to the “independent contractors” by deducting them from workers’ pay.
Courts look at several factors to determine whether a worker is an employee or an independent contractor. The most important factor is the employer’s right to control the worker’s manner and means of performing the job. If the employer dictates how the worker should do the work, what tasks to accomplish and how to accomplish them, then the worker is an employee and not an independent contractor.
Misclassified employees lose money such as overtime pay, wages for missed breaks, and reimbursements for business expenses. These expenses may include fuel, insurance, living, and other travel expenses; purchasing supplies, tools, materials, or equipment such as cell phones related to work.
If the misclassification occurred for several years, the back wages and reimbursements owed may be significant. Consider the case filed by a class of newspaper carriers against The San Diego Union Tribune. The newspaper allegedly misclassified its carriers as independent contractors, in order to avoid taxes and potential liability for carriers’ accidents while on the job.
Reports showed that the newspaper controlled the manner and means by which the carriers performed their tasks. The newspaper instructed the carriers on how they should pick up their papers, assemble the papers and whether or not to bag the newspapers. If subscribers complained, the carriers’ pay were reduced. Carriers had to undergo intensive training and coaching. They did not have their own business and could not assign their routes to others.
The newspaper event called the carriers in the morning to wake them up if they did not arrive on time. It conducted audits and field checks of the carriers’ performance, changed a carrier’s route or required the carrier to deliver alternate publications. Even though the carriers were required to buy a bond and to buy auto insurance, the carriers did not have their own business but rather were performing an integral part of the newspaper’s business.
After trial, the Court awarded a total of $11,114,211 to the class for reimbursement of expenses, interest, and attorneys’ fees. $3,188,445 of this award was for the reimbursement of expenses alone!
An evaluation of whether a worker is an employee or independent contractor involves an analysis and application of technical requirements. “Independent contractors” or “1099 workers” should not hesitate to consult with experienced employment attorneys to determine if they are really employees entitled to greater protections under the law.
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The Law Offices of C. Joe Sayas, Jr. welcomes inquiries about this topic. All inquiries are confidential and at no-cost. Atty. Sayas’ Law Office is located at 500 N. Brand Blvd. Suite 980, Glendale, CA 91203. You can contact the office at (818) 291-0088 or visit www.joesayaslaw.com.
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C. Joe Sayas, Jr., Esq. is trial attorney who has obtained several million dollar recoveries for his clients against employers and insurance companies. He has been selected as a Super Lawyer by the Los Angeles Magazine, featured in the cover of Los Angeles Daily Journal’s Verdicts and Settlements, and is a member of the Million Dollar-Advocates Forum.