Independent Contractor Lawsuits

Dozens of class action lawsuits have been filed by independent contractors who say they’re actually employees under the law.

The workers claim that because they’ve been misclassified as independent contractors, they’re getting cheated out of overtime wages and a number of other rights typically afforded to employees. Macy’s, FedEx, Lowe’s and other big names have already been sued, paying out millions to workers they allegedly misclassified as “independent contractors.”

Why Would a Company Call Me an Independent Contractor If I’m Not One?

There are two possibilities: either they’re trying to save money and/or they’re confused by federal and state labor laws governing the important distinction between employees and independent contractors.

Companies who hire independent contractors don’t have to pay for a lot of things, including unemployment taxes and workers’ compensation insurance. They also don’t have to make Medicare or Social Security contributions on money paid to independent contractors.

Additionally, unlike employees, independent contractors aren’t entitled to the minimum wage or overtime pay. Contractors also have no legal rights to form unions or take leave under the Family Medical Leave Act (FMLA), and are not protected against discrimination and sexual harassment.

How Do I Know If I’m an Employee or Independent Contractor Under Employment Laws?

It’s not always easy to tell, but the Department of Labor (DOL) has it boiled it down to this – if you’re in business for yourself, you’re an independent contractor, but if you’re economically dependent on the company, you’re an employee.

According to the DOL, there are six factors that determine whether a worker is “economically dependent” on the company he or she is working for. One of these factors is the level of control the company has over the worker. While there a number of different “tests” – at both the state and federal level – that help determine independent contractor status, the level of control the company exercises is considered in almost all of them.

What’s This About Control?

The more control a company has, the less likely it is that the worker is an independent contractor.

In nearly all the lawsuits filed by independent contractors, the contractors argue that because the company exercised “significant control” over them, they are employees.

Someone who is in business for him or herself would mostly like have a say in these matters.

It’s important to remember that just because a company calls you an independent contractor – or even gives you a 1099 – doesn’t mean that you are one. It’s up to the law, not the company you work for, to decide your employment status. In fact, the Department of Labor just released guidance that says most workers are employees under the Fair Labor Standards Act (FLSA).

Industries at Risk for Employee Misclassification

Below you will find examples of industries that were either targeted by government investigations or hit with class action lawsuits over their classification of their workers. This list is not exhaustive.

Have These Lawsuits Been Successful?

If you’re confused about whether you’re an employee or an independent contractor under the law, get in touch with us today by filling out the form on this page. One of the attorneys we work with may then reach out to you to help determine whether you’ve been misclassified. If you’re really an employee working as an “independent contractor,” you could be owed money through a class action lawsuit.

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