Do I have a case?

I worked for a company in Staten Island from 2002-2005 and was treated unfairly.

The employer, knowingly, treated me as an independent contractor from the start to avoid in paying necessary taxes and benefits for me.

He directed how I did my work, when I took lunch, and all hours I worked.

Also, I was docked on several occasions for being late (in his mind) and being out sick, etc.

There is a company employment policy which is quite good, of which I did not enjoy any of the benefits.

Do I have a cvase

1 answer  |  asked May 19, 2008 4:00 PM [EST]  |  applies to New York

Answers (1)

David M. Lira
Litigation by Independent Contractors

Whether a particular individual has a viable case I would not know without doing a more thorough evaluation at an initial consultation. However, the employer use of independent contractor status is an important topic, because so many employers seem to be using independent contractor status to avoid costs associated with hiring employees.

I almost entirely represent employees, but I have to say that employers attempting to employ people as independent contractors rather than employees is a practice that they engage in at their peril. Although, with one important exception, there is unusually little that individual can do to remedy this abusive practice, employers risk very large liabilities if governmental agencies catch them misclassifying employees as independent contractors. Before classifying someone as an independent contractor, employers are well advised to be sure this person will genuinely be treated as an independent contractor.

Here is the danger that employer's face: One employee complains about being misclassified as an independent contractor. The agency receiving the complaint will look not just at this single individual but all individuals classified by the employer as an independent contractor. The employer could be held liable for social security contributions, and workers' compensation and unemployment insurance premiums for all misclassified employees, going back several years, potentially even beyond the hire date of the complaining employee. That can easily add up to a lot of money. And don't forget the extra penalties and interest.

There have been a few successful cases where a misclassified employee sued an employer to get benefits given to regular employees. A misclassified employee might, for example, sue for health benefits or pension benefits. However, it turns out that employers had an easy way to avoid this kind of liability. It basically involved refining the definition of the term "employee" in the documents governing the provision of benefits. So, now, the likelihood is that a misclassifed employee has little change of succeeding in a case like this.

I would generally advise misclassified employees to apply for unemployment benefits if the employer terminated the alleged independent contractor relationship, or to apply for workers' compensation if injured on the job. I would certainly expect the employer to fight the application, claiming the independent contractor status, but if the misclassified employee fights, I thing the employee has a good chance of eventually getting these benefits, and possibly getting the employer into deeper trouble.

The one potentially valuable claim that individual misclassified employees might be able to bring is an claim for unpaid wages, particularly unpaid overtime. With liquidated damages and interest, these claims quickly add up, so it is usually worthwhile checking to see if you have a claim by speaking with a qualified attorney.

One last subject should be touched upon: non-compete provisions. If you were a true independent contractor, that would normally mean, under the law, that you are free to work not just for this one employer, but for anyone else you wanted to, including competitors of the employer. If an employer makes you an independent contractor, that should logically mean that you are not bound by any previous non-compete agreements that the employer may have required you to enter into. However, this is an issue that still needs to be litigated.

posted by David M. Lira  |  May 20, 2008 10:41 AM [EST]

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