According to a New York Times article, the feds are cracking down on employers that classify employees as independent contractors.
Classifying regular workers as independent contractors allows companies to get around minimum wage, overtime and antidiscrimination laws. Workers classified as independent contractors also do not receive unemployment insurance if laid off or workers’ compensation if injured, and they rarely receive the health insurance or other fringe benefits regular employees do. Of course, this results in substantial savings for the employer. According to the article, the most often misclassified workers are truck drivers, construction workers, home health aides and high-tech engineers.
Sometimes, though, the employer may have to provide workers compensation coverage to employees in order to bid on government contracts. Or, in the construction field, a contractor may require a subcontractor to furnish workers compensation coverage for employees in order to protect the contractor. Sometimes in these situations the employer will provide workers compensation coverage but will deduct the premiums from the compensation paid to workers classified as independent contractors. In these situations, very specific rules apply for the employer to classify the workers as independent contractors. Otherwise, it is illegal to withhold workers compensation premiums from a worker’s check. At our offices, we currently represent a group of employees who faced this very problem. Tens of thousands of dollars were withheld from the workers to pay workers compensation premiums.
If your employer classifies you as an independent contractor, make sure you are truly independent. Who has the right to control your work? Do you have the ability to independently profit from your work? Have you made a significant investment in equipment or supplies to perform your work? Is your work with your current employer temporary? Who sets the hours? Who sets the pay? Now, if you are truly and independent contractor, look at the check you receive and see what is taken out. If workers compensation premiums are withheld, see a lawyer to determine if it is legal for you to be required to pay the premiums from your check.