Misclassification of Employees: Mistakes To Notice

Businesses rely on their employees to perform important tasks. However, the  compensation process isn’t as seamless as it sounds.  

Unfortunately, misclassifying employees as independent contractors occurs more often  than it should. Here is an overview of what to look for if you believe that your employee  rights have been taken advantage of. 

What’s Employee Misclassification? 

Employee misclassification is the deliberate act of an employer labeling an employee as  an independent contractor for fraudulent gains. Employers have selfish reasons for  misclassifying employees as independent contractors.  

This type of fraud lowers costs because employers avoid having to pay unemployment,  taxes, and workers compensation to each employee. Misclassification also prevents employers from being legally obligated to pay their employees minimum wage and special  benefits such as overtime, disability, and sick leave. Some employers offer to compensate  their employees out of the books to avoid basic legal employment obligations. 

What’s an Employee?  

New Jersey law states that you are an employee if you receive payment for providing a  service. You are still considered an employee even if you only work on a temporary or  part-time basis. Contact an employment lawyer in New Jersey if you believe that your  rights have been taken advantage of.

What’s an Independent Contractor?  

Independent contractors are self-employed workers who provide services to someone.  The common rule is that once independent contractors perform a service, the payer has  the authority to control the result of the service and not how it was administered.  

Independent contractors are often excluded from traditional employment benefits such as  health insurance, social security, and different types of retirement accounts.  

Perhaps you are unsure of your status because your employer had you sign an  independent contractor agreement. That does not automatically make you an  independent contractor.  

New Jersey law states that only studying the contractor agreement without analyzing the  entire employee-employer relationship is acting in bad faith. Employment lawyers in New  Jersey are ready to assist mistreated workers.  

What’s an ABC Test?  

The ABC test is commonly used in employee versus contractor disputes. Employers may  use the ABC Test to argue that they rightfully classified a worker as an independent  contractor instead of an employee.  

● Part A outlines that you have been free from control or direction while providing a  service.  

● Part B outlines that the service is generally performed outside the general course  of the business or the service was performed outside the general place of  operation.  

● Part C outlines that you are actively involved in an independent trade or  business. 

If you qualify for any of these exemptions, your employer rightly classified you as an  independent contractor instead of an employee.  

Remember that the burden of proof is on the employer. If the employer fails to establish  every part of the ABC rule, then you are entitled to the benefits and protections under  New Jersey law.  

What Happens When Your Employment Is  Misclassified?  

The state agency will award you the appropriate remedy if you are misclassified. That  could be back paying as a result of being misclassified via minimum wage or overtime  pay.  

The employer will be punished for violating New Jersey wage laws. The Department of  Labor and Workforce Development may take action and issue fines for every misclassified employee.  

Other punishments may include a stop-work order and the suspension of multiple licenses  that are held by the employer. The employer may also be forced to pay the Department. 

Am I Protected from My Employer’s Retaliation for the  Misclassification?  

Employees are legally protected from employer retaliation. Be aware that you are protected even if you inquire instead of making an official complaint. 

Are You Looking for an Employment Lawyer in New  Jersey? 

Misclassifying employees as independent contractors happens. If you are a victim of  retaliation, the Department is authorized to issue an administrative penalty against your  employer. 

Having an employment lawyer in New Jersey is beneficial because they know how to  assist you. They can inform you of your rights and simplify things during difficult times.  

If you still have questions, contact Ashton E. Thomas Esquire, an employment lawyer in  New Jersey.  

Ashton E. Thomas has experience protecting workers and making sure that they receive the benefits they deserve. Don’t fight the employee vs contractor dispute alone. Ashton E. Thomas Esquire will help you.