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Are you a contractor or employee? How do you know?

In today's economy, more and more people are cobbling together a series of "gigs" to earn a living. Often, this means working as an independent contractor instead of as a full-time employee.

But, just because your employer decides to classify you as a contractor doesn't mean they're right. Employers routinely misclassify workers as contractors when they should be treated as employees.

Sometimes this is an honest mistake. In other cases, it's an intentional act designed to save money and limit workers' rights. Regardless of the cause, you have a right to stand up and take action. Don't let these common misconceptions stop you from asserting your legal rights.

Myth #1: If I get a 1099, I'm a contractor

Legally speaking, whether a person is a contractor or employee depends on the kind of work they do. Tax forms just tell you what your employer has decided to classify you as. They don't tell you whether your employer was actually right.

For tax purposes, whether a person counts as an independent contractor depends on how much the employer can control their work. The IRS uses a multi-part test to make this determination.

Myth #2: If I pay taxes as a contractor, I'm not protected by other laws

The rules for determining whether someone is taxed as a contractor are different from those that govern how a person will be treated under other laws. For example, workers count as "employees" under the Fair Labor Standards Act as long as they are "economically dependent" on their employers instead of being in business for themselves.

The FLSA is a federal law that governs things like overtime, minimum wage and working hours. California also has its own laws on this subject.

Myth #3: I agreed to be an independent contractor, so that's what I am

Again, what matters is the type of work you do, not how your employer decides to define your role. Just because your employer tries to get you to agree to a contract that violates the law does not mean you lose your rights. The law understands that employers often have the upper hand, and that workers will sometimes agree to unfavorable arrangements because they need the money.

You may legally be an employee, even if you signed an agreement defining you as a contractor.

Myth #4: I work from home, so I'm a contractor

The location you work in doesn't matter. What counts is how you do your work, and how much control your employer has. Employees can work at home, and contractors can come into the office. The location in which you do your work has no impact on your legal classification.

If you think you may have been wrongly classified as a contractor, it is always a good idea to talk to a lawyer who can help you understand the options available to you under the law.

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Law Offices of Reisner & King LLP
14724 Ventura Boulevard, Suite 1210
Sherman Oaks, CA 91403

Phone: 818-981-0901
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