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Independent Contractor Attorney

Los Angeles Independent Contractor attorney Cyrus Shahriari wants you to know that some employers deliberately misclassify employees as independent contractors so they can avoid taxes, not pay employees benefits, and avoid paying overtime to employees.

Testimony in 2007 before a House committee estimated that the federal government loses $3.3 billion annually due to misclassification of employees as independent contractors.

Differences between Independent Contractors and Employees

Employees who are treated as independent contractors:

  • Pay higher taxes.
    • You are responsible for all of your own employment taxes.
    • If you make more than $600 from one company, you must pay quarterly estimated federal taxes.
  • Lose important rights.
    • You are not entitled to workmans’ compensation or unemployment insurance.
    • You are not covered by many state and federal anti-discrimination, overtime, or wage and hour laws.
    • You are not included under California OSHA or Federal OSHA to ensure a safe and healthy work environment.
    • You are not entitled to employee benefits such as vacation, sick days, paid holidays, pension plans, stock options, and health insurance.
You May be an Employee Even If You:
  • Signed a contract or letter agreeing to be an independent contractor.
  • Worked for the company sporadically, inconsistently, or on-call.
  • Worked only on a commission basis.
  • Were not supervised.
  • Worked for more than one company.
  • Asked to be called an independent contractor.
  • Received a 1099 instead of a W-4.

If you are really an employee but being called and treated as an independent contractor, you are losing money and benefits owed to you.

To find out if you have been misclassified as an independent contractor versus an employee, contact Los Angeles independent contractor attorney Cyrus Shahriari for a free, no-obligation, and confidential consultation. You pay nothing and put no money down until your case is resolved.

Determining if You are an Independent Contractor or an Employee

There are specific legal criteria under California law and Federal law that the IRS, the Department of Labor, and the California EDD uses to determine if you are an independent contractor or an employee.

The state and the federal government are both examining whether you or the employer control the manner and the means that a task is accomplished.

If you are an independent contractor, you are given a job to do. The employer does not tell you how to do it, where to do it, what hours to work on it, or give you the tools to get the job done. As an independent contractor, all that matters is the result – that the job is completed.

However, California and the federal government do not necessarily use the same standards to determine if you are an independent contractor or an employee.

How California Determines an Independent Contractor

California uses the “Common Law Test.” This is a list of factors the state uses to determine who is controlling the manner and the means of the job.

No one factor is decisive. Instead, the state is looking at the overall picture.

Some of the factors the state examines to determine who has control is:

  • Whether the employer can discharge you at-will and without cause.
  • Whether you are engaged is a specific occupation.
  • Whether the work is usually done under supervision or by a specialist who is not supervised.
  • Who supplies the tools, instruments, equipment, and where the work is done.
  • For what length of time you provided the services.
  • Whether the work is part of your regular business.
  • Whether you and the employer believe you are in an employer/employee relationship.

The California Supreme Court also ruled on specific factors that must be looked at to determine if you are an independent contractor or an employee. These factors further narrow the definition of an independent contractor.

In the last several years there have been significant changes as to how an independent contractor versus an employee is defined. In September 2019, the California Assembly passed California Assembly Bill 5 (AB 5), which goes into effect Jan. 1, 2020. The law codifies a more strict set of requirements mandated by the California Supreme Court resulting from the case Dynamex Operations West Inc. v. Superior Court of Los Angeles, (2018) 4 Cal. 5th 903 (Cal. Sup Ct April 30, 2018).

Gig economy companies such as Uber, Lyft, and DoorDash, are very unhappy with AB 5. They all are determined to keep their workers as independent contractors, even if they have to fund a state ballot initiative to do it.

What has always been a complicated area of law is now even more intricate. Los Angeles independent contractor attorney Cyrus Shahriari urges you to consult an experienced independent contractor attorney if you need assistance in this matter.

How the Federal Government Determines an Independent Contractor

The IRS decides whether you are an employee or an independent contractor.

The IRS also uses the Common Law Test. Additionally, it developed 20 factors, based on court cases and administrative rulings, to make its decisions.

Like California, the IRS is not looking at any one factor. It recognizes that the importance of the factors differ depending on the occupation and the context in which the services were performed.

The IRS is looking to see how much control the employer has on the independent contractor’s process. Each decision is made on a case-by-case basis.

Some of the factors on the IRS list are (partial list):

  • What instructions are given.
  • What training is provided.
  • Who provides what services.
  • Who hires, supervises, and pays assistants.
  • Who sets the work hours.
  • Whether the work is considered to be full-time.
  • Whether the work is done on the employer’s premises.
  • Whether reports are oral or written.
  • Whether payment is hourly, weekly, or monthly.
  • Whether business or travel expenses are paid.
  • Who furnishes tools or equipment needed for the job.
  • Whether the independent contractor has a significant investment in the company.
  • Whether the independent contractor will realize a profit or loss.
  • Whether the independent contractor is working with more than one firm at a time.
  • Whether the independent contractor also makes his services available to the public.
  • Whether the employer has the right to discharge.
  • Whether the independent contractor has the right to quit.
Retaliation

It is always uncomfortable to sue an employer. If you are still working for the company, you fear being terminated, laid off, not being promoted, or some other negative reaction. If you are no longer working for the company, you may fear being “black balled” in the industry.

The law knows these are all real fears. That is why it is against the law for your employer to retaliate against you for bringing suit, for winning a suit, or even for losing a suit.

If your employer is found guilty of retaliation, you may be eligible for additional compensation.

Timing Matters

If you are even thinking you might have a case, contact Cyrus Shahriari, a Los Angeles independent contractor attorney as soon as possible for a free, no-obligation, and confidential consultation.

All civil cases have a statute of limitations (deadlines). If you miss the deadline to file a case, you lose all rights to bring legal action on that issue.

You also want to contact Los Angeles independent contractor attorney Cyrus Shahriari as soon as possible so he can take steps to ensure that records are not lost and that witness statements are taken before anyone has time to forget or to disappear.

If It is Determined You are an Employee

If it is determined that you have been misclassified and you ARE an employee, rather than an independent contractor, this is how the ruling could affect you:

  • Wage & Hours: If you are found to be an employee, your employer may be liable for:
    • Paying you all unpaid wages for up to three years, including any time that should have been counted as overtime.
    • Penalties of $100 to $200 per employee per pay period and up to 25% of the wages not paid to each employee for each pay period, for not paying you all your wages due each pay period.
    • Penalties of up to $250 per employee for first violation and $1,000 per employee for subsequent violations for not providing you an itemized wage statement each pay period.
  • If You are Fired or Laid Off: If you are fired or laid off and found to have been an employee, your employer must have paid you all your wages due in a timely manner.If the employer did not, the employer is liable for:
    • Penalties of up to 30-times the employee’s daily wage, regardless of the actual amount of the unpaid wages due.
  • Workers’ Compensation: If you are hurt and found to be an employee, your employer is liable for:
    • Workers’ compensation claims and any civil actions you take against the employer due to your injuries.
    • A penalty of up to 10% payable to the state.
    • An additional penalty of 10% of any workers’ compensation benefits you can recover.
    • Your attorney’s fees.
  • Responsibility for Negligence: If someone else is hurt by your negligence and you are found to be an employee, your employer is liable for any injuries caused by your negligence while you were employed by the company.This means that the employer is liable for any civil case (such as a car accident) brought by the injured party.
  • Unemployment or Disability Insurance: If you are found to be an employee, your employer can be:
    • Assessed for the amounts that should have been withheld for your unemployment insurance, disability insurance, and state income tax.
    • Liable for a penalty of 10%, plus interest, of any unpaid contributions.
Independent Contractors are Protected from Harassment

As an independent contractor one of the few protections afforded to you is protection from harassment by California’s Fair Employment & Housing Act (FEHA).

It is illegal to harass an independent contractor based on:

  • Race
  • Religion
  • National Origin
  • Physical disability
  • Mental disability
  • Medical condition
  • Marital status
  • Sex
Discrimination

An independent contractor has no protection under the law from discrimination.

Contact The Shahriari Law Firm

Determining whether or not you should be classified as an independent contractor or an employee is complicated. It really takes a Los Angeles independent contractor attorney like Cyrus Shahriari to examine state and federal laws to see how they affect your specific situation.

For a free, no-obligation, and confidential consultation, contact Los Angeles independent contractor attorney Cyrus Shahriari.

Remember, you pay no money down and you pay nothing until your case is resolved.