As an employee, you have certain rights such as minimum wage, workers’ compensation, medical leave and overtime. If you are an independent contractor, you do not necessarily have grounds to claim these rights. Some employers misclassify employees as independent contractors to avoid paying benefits such as workers’ compensation or overtime, as well as to avoid a payroll tax obligation.
However, it is not your employer who gets to decide whether you are an independent contractor. Federal regulations and guidelines apply to make sure that people who fit the definition of an employee get the rights the law entitles them to. The United States Department of Labor debunks some common myths about independent contractors and misclassification that you may have heard from your employer.
1. Once you are an independent contractor, you are always an independent contractor
Maybe at one point, you were a legitimate independent contractor. However, if the nature of your work has changed, you may now be an employee if your work fits the legal definition.
2. If you work from home or off-site, you are an independent contractor
The definition of an employee does not specify working on-site or off-site. There are independent contractors who work on-site and employees who work off-site. As long as your work meets the legal definition of an employee, you are not an independent contractor regardless of where you work.
3. You are not an employee if you are not on the payroll and receive a 1099 form
Receiving a 1099 form does not automatically make you an independent contractor. It is a consequence of how your employer has classified you for tax purposes, but it does not necessarily mean that your employer has classified you correctly.
Briefly, you are an independent contractor if you are in business for yourself and maintain control over the work you do. If you are economically dependent on an employer who gets to dictate when and how you do the work, then you may be a misclassified employee.