Misclassification

There are two types of misclassification, and they are both illegal. 

The first type of misclassification relates to your employment status. This is often called independent contractor misclassification. This is where your employer pays you as an independent contractor, even though you are legally an employee. 

The second type of misclassification is when an employer denies you overtime pay by misclassifying you as exempt from overtime. 

Bodzy Law has you covered for both types of misclassification. 

Independent Contractor Misclassification

Independent contractor misclassification occurs when an employer tries to make its costs your costs by labeling you as an independent contractor. Oftentimes, the employer will point to a take-it-or-leave-it agreement that you signed before starting work and argue that just because the agreement says you are an independent contractor, you must be one. 

The problem with this approach is that it allows your employer to shift the burden to you for the expenses of your job, payroll taxes, and to evade its overtime obligations. The law does not care that your employer called you an independent contractor in a required agreement. Instead, the law looks at the economic realities of your work. 

Courts will look at factors to determine whether you are an independent contractor. These factors include:

• Whether your employer exercises control over you. For example, if the employer tells you how to do your job, when to do your job, and exercises quality control over your work, then it is exercising control. Also, if it requires you to wear uniforms or pass background or drug tests, then it is exercising control.

• Whether you are in a short-term or part-time arrangement, or whether you do all of your work for a single company for an indefinite or long-term period of time. If you are economically dependent on a single working relationship, then you are less likely to be an independent contractor.

• Whether you are performing the core services of the company. For example, if you are a delivery driver performing delivery services on a regular basis for a delivery company, then you are performing the core services of your employer, which means that it is highly likely that you are misclassified. However, if you are an accountant performing a discrete accounting project for the same delivery company, or a plumber fixing the delivery company’s sink, then you are more likely to be an independent contractor.

The financial ramifications of independent contractor misclassification can be significant. Potential financial impacts include all unpaid overtime for all misclassified contractors for a multi-year period, all unpaid expenses that contractors were forced to pay on behalf of their employer, and reimbursement of payroll taxes incurred by contractors. Some state laws also allow for liquidated damages or treble damages, which multiply the recoverable damages to punish the employer for misclassification.

Overtime Misclassification

Employers often misclassify employees as exempt from overtime in order to save money. If you are overtime exempt, your employer can require you to work as much as it wants, without paying you the overtime required by the law. Employers often incorrectly rely on exemptions that do not apply to justify not paying overtime. While there are many factors that go into assessing an exemption, the most common abuse occurs where the employer claims that you have more independent judgment and discretion than you actually have. For example, if an employer gives you the title of “Assistant Manager,” but you spend the majority of your time ringing up sales at a register, maintaining the employer’s facility, or doing the same every-day tasks as hourly employees, then you are likely misclassified.

Overtime misclassification claims are often pursued as class actions on behalf of all misclassified employees of an employer. If you are successful in proving misclassification, you can recover all of your unpaid overtime over a multi-year period on behalf of the entire class, as well as potentially recovering liquidated or treble damages, which multiply the amount that you can recover.

Do Not Let a Company Misconstrue Your Employment Status 

If you work in Northern New Jersey, Nashville, or anywhere throughout New Jersey, or Tennessee, and believe you were classified incorrectly, call us. A no-obligation thirty-minute free consultation will give you a clear understanding of your options.