If you have spent time in the working arena then you are likely familiar with the terms “independent contractor” or “employee” but what is the difference? Under the law, there is a difference. Individuals who are classified as independent contractors save an employer lots of money as the employer is not required to withhold income taxes from an independent contractors pay and the employer does not have to pay FICA (Social Security and Medicare) or FUTA (federal unemployment). On the state level, employers do not have to contribute to unemployment insurance and workers’ compensation funds.
With all of these benefits for the employer, it is easy to see why so many employers are quick to claim their workers to be independent contractors and not employees. However, how do you know if you are being misclassified or not? Some questions to answer when determining if you should be considered an employee or an independent contractor include:
- Is my compensation based on something other than a project-by-project basis?
- Are my hours determined and kept by my employer?
- Does my employer provide the materials and equipment necessary to complete my job?
- Does my employer instruct me on how to accomplish the work assigned to me or am I given autonomy to complete the job as I see fit?
Misclassification of employees as independent contractors denies workers access to benefits and protections, such as Family and Medical Leave, overtime, minimum wage, unemployment insurance, and certain employer-provided benefits that are available only to qualifying employees. Remedies for this misclassification include backpay, back taxes, interest, and civil penalties.
If you think you are improperly classified and being denied benefits then contact one of our Tennessee employment lawyers. At The Higgins Firm, we are happy to answer any questions that you may have.