Independent Contractors are not Employees


All too often individuals will call and ask about what help or assistance is available to them because they were terminated from their position and feel it was based on a discriminatory motive.  They may call because they want direction on how to file a claim to be compensated for hours they worked for a company.  Sometimes they call because they were injured while working.   Under normal circumstances, there is help available to those individuals who are classified as an “employee” working for a company.  There is the Equal Employment Opportunity Commission that can investigate a claim of discrimination.  The Department of Labor can investigate a workplace standard complaint or a wage claim.  The Workers’ Compensation Commission can determine if the employer is liable for a workplace injury.  These are just a few of the avenues available to employees to have their claims investigated to see if a wrong was possibly committed by a company against an employee.  But what happens when a company classifies that individual not as an employee, but as an independent contractor?

If a company had its way, it would classify all individuals as independent contractors.  In years past, many companies did just that. Fedex for example classified a majority of its drivers as “independent Contractors”.  It was later found after an employee sued Fedex, that Fedex was mis-classifying its employees and they were barred from that practice and faced hefty fines.  Since that time, the Dept. of Labor implemented a more comprehensive analysis on how and when an individual can be classified as an independent contractor. Even so, many businesses continue to risk classifying employees as independent contractors, even if those individuals would not qualify as such.  The reason(s) for this are pretty simple, the following list of cons on why it is not a good idea to operate as an independent contractors are as follows:

1.Not only are you paid with a 1099, but your state and federal taxes are your own liability.

2. You are not eligible for company paid benefits, such a medical insurance, vacation, sick-time, Family Medical Leave and in many instances, not covered under workers’ compensation.

3. As an independent contractor, if you find yourself without a job, you cannot collect unemployment.

4. If you face discrimination on the job, you probably have no recourse against the company as an employee under state and federal discrimination laws.

5. You are not afforded protections under the Fair Labor Standards Act regarding your hours worked.  You are further at a heightened risk of not being compensated for your services.

6. Many companies will classify you and independent, but they control where you perform, how you perform, what hours you are to perform, even if doing so, may result in a mis-classification investigation by the Dept. of Labor because the savings far outweigh the penalties.

Be wary of any company offering you a position as an independent contractor.  It may appear to be a great prospect.  You get to make your own hours, run your own business, set your own salary/rates.  Well, that is what you thought was going to happen.