Employment and wage laws are in place for the protection of workers and their rightful earnings. In an ideal world, these laws would ensure that workers are always treated fairly, but employers always have and probably always will look for loopholes that allow rules to be bent. One example of this is the misclassification of employees as independent contractors. If you suspect your employer may be guilty of this, consider the following four differences between the two types of workers.
Employees are entitled to overtime pay.
One of the biggest differences between employees and independent contractors is that employees are entitled to overtime. Independent contractors, on the other hand, are generally not eligible for overtime pay. This is because contractors are hired to provide services as needed whereas employees are hired for regular work. Sometimes companies incorrectly classify workers and consequently avoid paying overtime wages.
Companies have control over employees.
Another significant difference between employees and contractors is a company's ability to control the behavior and actions of an employee. As an independent contractor, you have the freedom to offer services on your own terms, but employees are subject to the regulations imposed by their employers. Simply put, in the workplace, employees have less freedom than contractors, but employees are also eligible for overtime wages and other benefits of full employment.
Companies must pay employees' business expenses.
In addition to ineligibility for overtime, one of the financial implications of being an independent contractor is responsibility for your own business expenses. Whether this means paying for your own gas or financing your home office, you will typically not be eligible for reimbursement from any of the companies you perform work for. If you are an employee who has been misclassified, this could add up to some hefty expenses that should have been covered by your employer.
Employees and contractors have different relationships with employers/companies.
Differentiating between employees and independent contractors ultimately comes down to the nature of the relationship you have with the company you work for. If the work you perform is ongoing or an essential function of the business, you may be performing the work of an employee.
If your employer has misclassified you or failed to pay you for overtime, you should contact an attorney. An experienced employment lawyer can help you seek recourse and help you get the compensation you are owed.