For purposes of the Fair Labor Standards Act (FLSA) and many other US and Georgia laws, there are two classifications of workers: Employees and independent contractors. You may not think that the distinction affects your average work day, but it is an important one when it comes to critical benefits and protections that apply in the workplace environment. When a company improperly positions you as an independent contractor instead of an employee, you miss out on these advantages. The situation is termed “misclassification,” and it can harm your rights and result in significant losses.
Misclassification is unlawful because of the consequences to tax revenues and employee interests. A company can face serious penalties for violating the laws, but any punishment by government agencies does nothing to compensate you. Fortunately, these statutes provide you with legal remedies to recover compensation for the losses you sustain. You can trust a Georgia misclassification lawyer to handle the legal details, but you should understand the consequences of misconduct by your employer.
Personal Implications with Employee Misclassification: The societal impacts and consequences for tax revenues notwithstanding, there are some issues that could affect you personally when you are not properly treated as an employee. A few of the implications include:
- Minimum Wage: Under regulations established by the US Department of Labor, Wage and Hour Division (WHD), federal minimum wage is $7.25; Georgia has enacted a minimum wage of $5.15, but employers subject to the FLSA must pay the federal minimum wage. These requirements apply only to true employees, so a company who designates you as an independent contractor could get away with paying less than minimum wage.
- Overtime Wages: The FLSA requires employers to pay overtime wages for an employee who works more than 40 hours in a work week, at a rate of 1.5 the hourly wage for every additional hour. Some employees are exempt, including those in administrative, executive, and professional positions – as well as workers in computers and outside sales. Overtime rules only apply to non-exempt employees, not independent contractors.
- Anti-Discrimination Laws: Title VII of the Civil Rights Act prohibits employers from treating you differently or taking adverse action on account of race, gender, sex, age, disability, and many other protected characteristics. However, Title VII only applies to companies with 15 or more workers, and it only restricts employers in their treatment of employees. Misclassification as an independent contract means you could be subjected to unlawful treatment.
- Family Medical Leave Act: FMLA and related statutes allow employees to take a designated amount of time off work for certain reasons, with job security upon their return. Plus, it is possible to retain some benefits during the period of leave. The advantages of leave laws do not apply to independent contractors.
Factors Related to Employee-Independent Contractor Classification: The nature of your work relationship is the crux of determining whether you are a true employee or independent contractor; labels or titles are less important. Factors in making the determination include the amount of control the company wields over the worker, such as hours, work location, job performance, and others. Considerations that do NOT automatically make you an independent contractor include:
- You signed a contract agreeing to be an independent contractor;
- You work from home; and,
- You receive a 1099 instead of a W-2 for income taxes.
Consult with a Georgia Employment Attorney About Misclassification
If you believe a company has misclassified you as an independent contractor instead of an employee, time is of the essence to discuss your situation with our skilled lawyers at the Vaughn Law Firm. Please contact our Decatur, GA office today at 877.615.9495 or via our website to schedule a free consultation. Our team can explain your rights and remedies after reviewing the details of your case.