The use of independent contracting has grown dramatically over the past decade. This expansion has allowed employers to wrongfully benefit themselves at the expense of their employees through the process of Misclassification.
What is Misclassification?
Employee misclassification is the practice of wrongfully labeling workers as independent contractors, rather than employees. The practice allows employers to avoid paying unemployment and other taxes on workers, and from covering them on workers compensation and unemployment insurance.
On April 30, 2018, the California Supreme Court issued a landmark decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, providing clarification on the laws of misclassification in the state of California. As a result of this clarification, it became clear that a substantial portion of independent contractors in California have been misclassified by their employers.
What are the Damages of Independent Contractor Misclassification?
A person who is wrongfully classified as an independent contractor is not covered by the most basic labor standards: minimum wage, overtime, family and medical leave, and the fundamental proposition that one should be compensated for the hours they work. Misclassified employees also are denied access to critical protections they are entitled to by law, including safe workplaces and unemployment insurance. Additionally, an independent contractor is responsible for paying all federal (e.g. Social Security, Medicare) and state payroll taxes, making the appropriate contributions as both an employer and employee, and a failure to do so exposes the individual to significant penalties.
What Companies are Franklin D. Azar & Associates Investigating?
Franklin D. Azar & Associates are investigating the following companies. If you’re an employee of one of these companies in California and you feel as though you’ve been misclassified as an independent contractor, then contact us now.
- Financial services companies, including Raymond James
- Gig-economy companies (for example, companies similar to Uber or Lyft)
- Hospitals and healthcare employees
- California companies who classify workers as “independent contractors”
How Can I Fight Back?
Pursuing individual claims in response to misclassification may cost more than most employees could ever expect to recover. But many misclassified employees have chosen to band together in class action lawsuits, seeking recovery of the harm caused by misclassification and attempting to get employers to change the way they classify their employees. A class action lawsuit gives more people access to the judicial system for relief, saves on legal costs and court time, and allows individuals to combine their claims to make their case exponentially stronger.
Some people are concerned about going after a current or former employer, fearing they will be blacklisted or retaliated against. Fortunately, California law protects employees from retaliation by an employer against employees who seek to assert their rights. An employer who retaliates against an employee can be subjected to further litigation and could be forced to pay significant damages for retaliating or be subject to court orders to stop any retaliatory conduct.
Do I Have a Case?
The best way to determine if you have a potential case is to meet with a knowledgeable attorney. The attorney can review your employee contract, related employee materials, and the applicable law, and advise you on how to proceed.