Many unscrupulous employers resort to misclassifying their employees as “independent contractors” in order to avoid: 1) Paying overtime and benefits to the employee AND 2) Paying payroll taxes to the government. Both result in enormous harm to the community and to the families of the employees. Recently our Orange County Employee’s Right Attorneys have been approached by a number of employees from a local company that has classified over 35 inside sales employees as contractors and has avoided paying them overtime and in some cases even the minimum wage required in California. In order to determine if one is a contractor or an employee number of questions must be answered. The most important of these questions deals with the level of control that the employer has over the individual’s schedule. Case law has held that this test, developed under the Fair Labor Standards Act (“FLSA”), looks to whether the employee is economically dependent upon the principal or is instead in business for himself or herself. Other factors looked at our whether individual pays own expenses, pays for employees, set own goals and can and does take work in other places. What is important is that employers not be allowed to abuse the system by declaring otherwise regular employees as contractors. Such classification hurts us all!
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