Employee misclassification is a serious problem in New York City and throughout the country. When an employer classifies an employee as an independent contractor instead of an employee to save money, they violate local, state, and federal law. Employee misclassification can deprive employees of their rights, income, and employment benefits.
Contact an Employee Misclassification Attorney in NYC
If you’re an employee and you suspect that you’ve been misclassified as an independent contractor, you may be entitled to compensation with interest through an employment claim. At Woods Lonergan PLLC, we represent employees and employers in employee misclassification cases. Contact us today to learn more about your legal rights.
The Effect of Employee Misclassification
New York employment laws protect employees from employee misclassification. Workers are typically classified as independent contractors or employees. The distinction is critical. Independent contractors are not entitled to the same benefits and pay requirements as employees.
Employees have more rights and are entitled to more employment benefits than independent contractors under federal, state, and local employment laws. For example, in New York state, employers must provide employees with the following benefits:
- Workers’ compensation
- Social Security benefits
- Temporary disability benefits
- Minimum wage and hour protections, such as overtime pay
- Mandatory rest and meal breaks
At the federal level, employees may be entitled to up to 12 weeks of unpaid, job-protected leave for the birth or adoption of a child or a serious illness of the employee or a family member. Employees are also protected under the health and safety laws of the Occupational Safety and Health Act (OSHA).
Employees Misclassified as Independent Contractors
Misclassifying employees as independent contractors is a widespread occurrence that hurts employees. Employers will frequently try to classify employees as independent contractors to avoid paying benefits and adhering to labor laws at the federal and state level. There isn’t a precise definition of what constitutes an employee versus an independent contractor. Instead, we have to look at multiple factors. The more control an employer has over an individual, the more likely the individual is to be an employee. For example, if your employer sets your work hours and pay rate and decides when, where, and how your work needs to get done, you may be an employee rather than an independent contractor. Additionally, if you are paid on a salary and directly supervised by the employer, you may be an employee.
Pursuing a Claim Against Your Employer for Misclassification
Independent contractors do not have as many rights as employees under the law. When employers misclassify an employee as an independent contractor, the employer becomes liable for paying the employee back wages, including back overtime benefits and other types of employment benefits. The employer may be required to pay additional penalties to the employee. In New York, employees can demand back pay, compensatory damages, punitive damages, attorneys fees, and legal costs in addition to the following types of benefits:
- Owed wages, including minimum wage, overtime, and paid time off with interest
- Unfiled W-2 forms (income tax and withholdings and payroll taxes)
- Pro-rata shares of Social Security and Medicare contributions
Additionally, employees who’ve been misclassified may be entitled to compensation for missed employment benefits, including disability insurance, healthcare coverage, 401(k) contributions, unemployment insurance, and workers’ compensation.
Employees Misclassified as Exempt White-Collar Workers
Employers have a right to exempt some types of employees from minimum wage and overtime requirements. Employees who can be classified as executives, administrators, and professional employees are exempt from some state and federal wage-and-hour laws. Employers cannot simply state that an employee is exempt on this basis, however. The employee will need to meet certain requirements. For example, the employer must be paid a certain amount each week to be considered on salary. To be considered an executive, administrative, or professional employee, the employee must meet a duties test.
The requirements for these tests are different under New York labor law than under the federal Fair Labor Standards Act (FLSA). If you have questions about whether you have been properly classified as a white-collar worker, the employment law attorneys at Woods Lonergan can help you understand your rights. If your employer has misclassified you, we can advocate for your right to compensation.
Representing Business Owners in Employee Misclassification Cases
New York City business owners are responsible for complying with thousands of local, state, and federal regulations. Understandably, employers can make mistakes when classifying employees. Identifying whether an employer is an independent contractor or an employee can be confusing. The consequences of misclassifying an employee as an independent contractor are harsh. You could face liability for back taxes, workers’ compensation, back pay, overtime pay, and retirement benefits.
In some cases, employers can face additional penalties on top of the back wages and benefits they owe the employee. Claiming that you did not intend to misclassify an employee isn’t an adequate legal defense. When an employee can show that the misclassification was intentional, the employer can be required to pay additional penalties of up to 20 percent of all employee wages. Criminal penalties, including prison time, are also a possibility. Employers can also be required to pay 100 percent of Social Security and Medicare contributions.
If you face a missed classification claim from a current or former employee, it’s important that you reach out to an attorney as soon as possible. We will represent your business and help you implement best practices to avoid these types of cases in the future. Woods Lonergan has successfully defended many New York City employers against many types of employment claims, including Miss classification.
Reach Out to an NYC Employment Attorney
If you are a New York City employee, and you suspect that you have been misclassified or falsely accused of misclassifying employees as a business owner, it’s important that you reach out to an attorney. The employment attorneys at Woods Lonergan are here to review your case, answer your questions, and help you protect your legal rights. Contact us today to schedule your initial consultation.