27 Jan 2022

Independent Contractor Misclassification: Employee or Contractor?

independent contractor misclassification

Independent contractor misclassification is an unfortunate yet common occurrence in Houston, TX. Often, this misclassification is in a verbal agreement. However, many written agreements misclassify contractors as well. 

While this misclassification of contractor vs employee is not necessarily malicious, it is a fairly common practice across many industries. One common example is the construction industry, while a noteworthy instance is John Oliver’s coverage of the WWE, which maintains its wrestlers as independent contractors.

This shows us that some employers purposefully misclassify employees as independent contractors. Often, this is to benefit the company while employees have their rights stripped away. 

For instance, it allows employers to avoid paying out overtime that an employee deserves. Regardless of what your employer calls you, independent contractor misclassification depends on your relationship with the company. The core of the matter is the existence of the misclassification, not what the employer intended. 

More Than a Label: Employee vs Contractor

Work offers people safety and stability as well as an opportunity to contribute to their community. Ideally, employees receive fair treatment and respect. Moreover, a good job should allow you to provide for yourself and your family. 

Unfortunately, there are many corporations that attempt to remove that stability and security as they impose the label of independent contractor. This shifts risks and costs from the company to the workers central to their success. 

Beyond a label, independent contractor misclassification deprives employees of rights and protections. 

  • Minimum wage
  • Social Security contributions 
  • Collective bargaining 
  • Overtime pay
  • Unemployment compensation 
  • Workers’ compensation 

What’s the Difference?

Generally speaking, an “independent contractor” is someone in business for themselves. Typically, they are not an hourly worker. Moreover, they tend to supply their own equipment and materials as well as work for numerous clients. 

In many cases, the contractor reports to the company but works without supervision. 

Am I Misclassified?

It’s quite possible that you are a contractor who should be an employee. There are a few things to consider, though. Ask yourself these questions. 

  • Is your work the business of the company or a specialized outside task? If you participate in the day-to-day business of the company, you are likely an employee (or should be). 
  • Are you paid for your work or do you have an opportunity for profit or loss? If you have no control over your profit and are paid a set wage, you are likely an employee. 
  • Does the company supply your equipment? If you don’t supply your own work equipment, there’s a good chance that you are not an independent contractor. 
  • Do you work exclusively for a business, or is it one of your clients? If you have multiple clients, you are likely an independent contractor. However, working extended periods of time means you may be an employee.
  • Are you on an hourly wage? Many people who make income on an hourly basis are employees. 
  • Do you invest in the business? If you work for wages with no other investment in the company, it points to you being an employee. 
  • Does the company control how you do your job? Typically, contractors work on a specific job without supervision or control. If the company supervises you or directs how you do your job on a daily basis, you are likely an employee. 

While these factors offer good guidance on independent contractor misclassification, they are not definite. Depending on your answers, you might be misclassified. An experienced employment attorney has the knowledge to help you determine your classification. 

Speak to a Lawyer About Independent Contractor Misclassification 

Whether you work for a cleaning company or a fortune 500 company, it’s important to know your rights.

If you believe a company misclassified you as a contractor, schedule a free consultation with an employment attorney. As your advocate, your attorney helps you understand your situation and identify your legal options. 

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