Worker classification disputes are common in the state of New Jersey. These disputes can not only have a large effect on things such as a worker’s and an employer’s taxes, but also an employee’s rights to benefits, including workers’ compensation insurance, as well as overtime pay, liability, and more. If you are involved in an employment classification dispute, the attorneys at the Sattiraju Law Firm, P.C.—one of the premier employment law firms in New Jersey—can represent you.
Am I an Independent Contractor or an Employee?
Knowing whether you are a self-employed independent contractor or an employee can be difficult. And in many cases, your employer may wrongfully classify you as an independent contractor, even when you are technically employee, to avoid liability and the requirement to pay certain benefit types.
According to the Internal Revenue Service (IRS), a person is an employee if his or her employer controls what will be done and how it will be done. Furthermore, the National Law Review summarizes the ‘ABC’ test that is used to classify employees. Under the test, an individual can only be classified as an independent contractor in the event that he or she:
- Has been and will continue to be free from direction or control in regards to work performance;
- Performs work for the business that is outside the normal and usual course of business and employee practices; and
- Is engaged in an independently established occupation or trade.
What is the Difference Between an Independent Contractor and an Employee?
In short, the difference is the amount of independence an individual holds. When an individual works as an independent contractor, he or she works for him or herself. When he or she works, it is for a client, not a boss. When an individual is an employee, he or she works for his or her employer. Although it can seem like a fine line to draw, there are actually significant differences between independent contractors and employees when it comes to issues like rights and protections.
Independent contractors work under contracts that outline the job they are hired to perform, the agreed price for the job, and each party’s rights and expectations during and following the completion of the project.
Independent contractors must sign and complete W-9 forms when they begin a project. They also file their own business tax returns and are not eligible for employment benefits such as healthcare insurance and sick days.
Employees are hired to work for a salary or agreed-upon hourly wage. Unlike independent contractors, employees are paid for their time spent working, rather than for individual projects. Employees are hired to perform specific jobs and generally receive training from the company after they are hired.
Employees are eligible for benefits such as workers’ compensation coverage, healthcare benefits, vacation and sick days, and overtime pay. Employees must complete W-2 forms and are not responsible for filing business tax returns, only personal returns.
When an independent contractor is classified as an employee or an employee is classified as an independent contractor, the misclassified individual can face problems with his or her taxes and benefits.
If you are misclassified, contact your company’s human resources department to have yourself correctly classified. In some cases, individuals are deliberately misclassified in an attempt to save money – independent contractors are much cheaper for a company than employees. If this happens to you, contact an experienced employment attorney to take legal action against the company.
What Does an Employment Classification Lawyer Do?
An employment classification lawyer can help you to prove that you are in fact an employee, not an independent contractor, of the business for which you work. This is a common need of those in the trucking industry, drivers, those who work in construction, and workers in other industries where independent contractors are common. An attorney can not only help you to prove your status as an employee, but can also help you to prove that due to your employee status, you are entitled to certain employee protections.
Employment Attorneys in New Jersey
Whether you are an employee or an independent contractor plays a significant role in the protections and rights you are entitled to enjoy. Contact The Sattiraju Law Firm, P.C., to discuss your case with a member of our firm and determine how to proceed with your case given your position. We are one of New York and New Jersey’s premier employment law firms. We will draw upon our extensive record of success to provide you with top quality legal counsel and representation in the courtroom.
Call an Employment Lawyer in New Jersey for Help
At the Sattiraju Law Firm, P.C., our New Jersey employment classification lawyers have represented countless clients whose employment classification status was incorrect, and we have a high success rate with these case types. Misclassification of employees often results in denial of employee rights, such as failing to pay overtime, failing to pay certain benefits, failing to pay workers’ compensation claims, and failing to take liability under the theory of vicarious liability. If you are ready to set your worker classification status right, do not hesitate to call our New Jersey employment attorneys today to schedule your free case consultation today.