Saturday, May 21, 2016

Misclassification - Am I Really a Self-Employed Independent Contractor? How Do I Know if I am Self-Employed?

If You Have Been Paid as an Independent Contractor, But Are Really an Employee, You Can Make a Claim for Overtime, Benefits and Unemployment Compensation

Nowadays, it is very common for companies to intentionally misclassify workers who should be paid as w-2 employees as self-employed independent contractors paid on a 1099 basis.

You Are Right to Question Your "True" Status
Independent Contractors Do Not Receive Company Benefits or Overtime

That is so because a company is not obligated to provide benefits such as vacation pay and medical coverage to independent contractors, nor is it required to pay them overtime.

Misclassified Workers Excluded
From Company Benefits
Self-Employed Workers Must Make Social Security and Medicare Contributions Ordinarily Paid by Employers

Moreover, a company is not required to make social security and medicare contributions, or pay federal, state or local income tax on behalf of workers who it deems to be self-employed.  

Misclassification Hurts You -
and All Americans

If a company gets away with misclassifying a worker, it avoids obligations such as FICA, Social Security and Medicare contributions, which are then passed along to the misclassified individual.

The federal government mitigates the losses that would be sustained by the Social Security and Medicare funds by imposing a self-employment tax of roughly 14% on the self-employed worker.  This is twice the amount that a w-2 employee pays into these funds each year via weekly payroll contributions, the other half being made up by matching employer contributions.

If you have worked overtime, and are misclassified as an independent contractor, you may have an excellent claim for unpaid overtime compensation.

You Deserve to be Paid for ALL of the Hours You Work
Independent Contractors Are Not Entitled to Workers' Compensation or Unemployment Benefits 

In addition, companies are not obligated to make contributions into state workers' compensation and unemployment funds on behalf of independent contractors they employ, and self-employed workers are not entitled to receive such benefits UNLESS they can prove they were misclassified.

How Do I Know If I Have Been Misclassified?

There are a number of factors, called a "legal test," that are considered in determining whether an individual is an employee, as opposed to a self-employed independent contractor.

I have even a simpler test:  compare the way that the company treats you versus the way it treats true third-party companies that it deals with, such as its vendors and suppliers.  In doing so, ask yourself:

Are You the Master of Your Own Domain?
If so, You are Likely Self-Employed
*  Where does the vendor go to work each day?  Where do I?

*  How many businesses does the vendor provide services to?  How many do I work for?

*  To what extent is the vendor required to follow company policies such as those relating to dress code, attendance and schedule?  To what extent am I?

*  How many employees does the vendor have?  How many do I have?

*  Does the vendor have its own website?  Do I?

*  Is the vendor incorporated? Am I?

Are You Required to
Follow Company Policies?
The Company's Paper Supplier Isn't
*  Where does the vendor get its supplies, business forms and equipment?  Where do I?

*  Who provides the vendor with instructions as to what to do each day?  Who tells me my assignments?

*  Is the vendor required to attend your company's meetings?  Am I?

*  Is the vendor ever subject to discipline under your company's policies? Am I?

*  Who provided training to the vendor?  Did I receive training and, if so, about what and from whom?

*  Does the vendor have an e-Mail address registered to your company, a company business card or a company telephone extension? Do I have any of these thing?

Can I Get Unemployment in Pennsylvania if I Have Been Misclassified as an Independent 

Well-Aware of Misclassification Issue

 Yes, you may be entitled to unemployment compensation in Pennsylvania even if you were misclassified as an independent contractor.

Apply for benefits. In about 7-10 days, you will receive a Notice of Financial Determination stating that you are not qualified for benefits because you have no earnings.

You have 15 days to appeal that Notice of Financial Determination.  Do so, and when asked why you are appealing, simply say, "I disagree with the Determination."  You will then receive a Notice of Hearing before an Unemployment Compensation Hearing Referee.

In Pennsylvania, every worker is presumed to be an employee, and at a Referee Hearing, the burden of proof is on the employer to prove otherwise where you are concerned.  However, employers know this and, due to the risks they face if they lose (fines, taxes and the like), and the fact that the Referee Hearing is the only opportunity to make a record in the matter (appeals from Referee Decisions are limited to the review of the record established at the Hearing), they usually come well-prepared, and often accompanied by counsel.

You Only Get
 One Bite at the Apple...
To Score a Victory
You certainly want to consider hiring an attorney to represent you at that Referee Hearing.

Need Help Completing a Self-Employment Claimant Questionnaire From Pennsylvania Unemployment?

Pennsylvania's Claimant Questionnaire for Self-Employed Independent Contractors is designed for a variety of situations, and thus can be very confusing. However, anything you say on there may be used against you by the Service Center, and at any Referee Hearing, so it is very important that you get it right.

If You Have Been Misclassified as a Self-Employed Independent Contractor In Pennsylvania, You Can Win Unpaid Wages and Fringe Benefits in a Lawsuit Under Pennsylvania's Wage Payment and Collection Law

If your "co-workers" have received bonuses, fringe benefits such as vacation pay, overtime and severance, while you have been deprived of same due to misclassification, you can file a lawsuit and win a claim for such benefits, along with attorneys' fees and punitive damages, under Pennsylvania's Wage Payment and Collection Law.

I charge a relatively modest fee to help claimants make sure they properly complete the Questionnaire and accurately state their position in an attached Memorandum.

Can I Get Paid Overtime if I Was Misclassified as an Independent Contractor?

Yes, you certainly can.  I routinely collect overtime compensation on behalf of misclassified workers.

Thanks for checking us out.

Helping Misclassified Workers Since 1991
Philadelphia Area Attorney Representing Misclassified Workers

John A. Gallagher is an employment lawyer who represents claimants in Pennsylvania. 

John typically represents workers who need an employment lawyer in Philadelphia County, Delaware County, Montgomery County, Bucks County, Chester County, Berks County and Lancaster County.

Pennsylvania Unemployment Employment Attorney Provides Free Telephone Consultations (15 Minutes in Duration)

If you are looking for an unemployment lawyer, and live in Paoli, Exton, Phoenixville, Downingtown, Coatesville, West Chester, Newtown Square, Nether Providence, Springfield, Aston, Broomall, Marple, Villanova, Lansdowne, Wayne, Ardmore, Bryn Mawr, Glenolden, Havertown, Haverford, Limerick, Oaks,  Lower Merion or any of their surrounding towns, feel free to send me an e-mail or give me a call.  I am always glad to spend some time with people via a free telephone consultation.

Have you Been Misclassified as a Self-Employed Independent Contractor?  

Click Here if you have questions about any aspect of employment law, from wrongful termination, to wage and overtime claims, to discrimination and retaliation laws, to Family and Medical Leave

Click Here if you have questions about any aspect of Pennsylvania Unemployment Law, from willful misconduct, to voluntary quit, to Referee Hearings, to severance issues

Click Here to e-mail John directly; Mr. Gallagher has handled hundreds of Referee Hearings throughout Pennsylvania.

Thanks for checking in with us.

1 comment:

Jones Morris said...

Please continue this great work and I look forward to more of your awesome blog posts. business articles