Independent Contractor Misclassification

The law prohibits companies from misclassifying employees as “independent contractors.” Misclassifying independent contractors can cost workers minimum wages, overtime pay, health insurance, and many other benefits. If you receive most of your pay from one company but are classified as an independent contractor, contact Tim to discuss your situation.

Independent Contractor Misclassification Lawyer

In general, real independent contractors are people in business for themselves who do work for multiple companies on a contract basis. The companies paying true independent contractors generally are not required to pay them overtime pay, minimum wages, health insurance, or other employment benefits.

For this reason, companies sometimes hire workers and call them “independent contractors” even though in reality the workers are employees. This often saves the companies money, by depriving the workers of overtime compensation, minimum wages, and other employment benefits, like health insurance, unemployment insurance, and worker’s compensation.

This denial of pay rights and employment benefits is lucrative to companies, but harmful to workers who are true employees incorrectly labeled “independent contractors.”

Regardless of what your work calls you, and regardless of whether you signed an agreement stating you are an “independent contractor,” you could be an employee entitled to overtime compensation, minimum wages, and other employment benefits.

Whether you are an employee or an independent contractor depends on several factors. Federal law emphasizes the “economic realities” of your situation, that is, whether you are “economically dependent” on the business you work for or are, as a matter of economic reality, in business for yourself. The factors include the degree of control your employer exercises over your work, your investment in equipment, materials or other workers, your opportunity for profit or loss besides your regular pay, the degree of specialized skill required, the permanency of your working relationship, and the extent to which your work is integral to the employer’s business. IRS guidelines and Virginia law use similar factors.

Here are some examples of employees who might be incorrectly classified as independent contractors:

  • A construction worker is paid an hourly rate or piece rate by one company or person, for working long hours on jobsites under the direction and supervision of another company’s foremen.
  • A nurse is paid an hourly or day rate by a staffing agency for working at a health care facility, when nurse is subject to the facilities’ rules and supervision, the facility sets work hours, and the relationship is more ongoing than an isolated project.
  • A home health aide is paid by a home-care company to provide in-home care to clients, where the company sets work hours, provides rules or policies controlling the aide’s work, and has the ability to terminate the aide or determine which clients the aide cares for.

Additional Resources

Independent Contractor v. Employee: Economic Realities Law 

Law of Joint Employment

Virginia’s Independent Contractor Misclassification Law: Control and Independence

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    Contact attorney Tim Coffield to help you determine whether you may have been improperly classified as an independent contractor, and whether you have a claim for additional overtime pay, minimum wages, or benefits.