When you make your living working in California, it is important that your employer classify you appropriately with regard to whether you are an actual employee or an independent contractor. The way your employer classifies you will have a considerable effect on your paycheck and the manner in which you pay taxes, so it is essential that you have the correct classification so you can make sure to cover all your bases.
According to the State of California’s Department of Industrial Relations, it is not uncommon for some employers to misclassify their employees as independent contractors so that they can save substantial money in key areas. Employers do not, for example, have to pay payroll taxes or overtime pay for independent contractors, and they also do not have to adhere to typical wage and hour laws regarding lunch breaks, meal periods and the like.
Employers also are not responsible for maintaining workers’ compensation insurance for independent contractors, nor are they liable for paying for unemployment benefits or disability insurance for their contract employees. Furthermore, anti-discrimination and retaliation laws do not extend to independent contractors.
So, what can you do if your employer misclassified you as an independent contractor and you are struggling to obtain overtime pay or otherwise get what you deserve because of it? Typically, you have two options. You can file a claim for the lost wages with the Division of Labor Standards Enforcement, or you can pursue legal action in court in an effort to recover what is missing.
This information about employee classifications is educational in nature and not a substitute for legal advice.