Misclassification Leads to Numerous Wage and Hour Disputes

It is not uncommon for Long Beach employers to want to save money in order to increase their company’s profits. One of the largest expenses of any business is its workers. Salaries, taxes and benefits can cost a significant amount of money. For this reason, some employers attempt to classify workers as independent contractors, which could give rise to wage and hour disputes.

Independent contractors do not receive benefits, and employers are not responsible for taxes and other expenses related to employees. This status also denies individuals certain legal protections enjoyed by those classified as employees. Many people actually meet the legal definition of an employee, but may not know it.

The Fair Labor Standards Act dictates what distinguishes a worker as an employee or an independent contractor. Even those who work from home or off-site, receive a 1099 or sign an agreement indicating that they are not an employee may not meet the legal definition. Just because something is considered “normal” in an industry does not make it legal. Even with agreement from a Long Beach resident, an employer may not misclassify an employee as an independent contractor.

Misclassification happens more often than most people realize. Workers and companies alike ought to take the time to understand what makes someone an employee versus an independent contractor. On the one hand, those recognized as employees should receive the protections and benefits they deserve. On the other hand, companies could avoid wage and hour disputes, along with repercussions from governmental agencies, by putting each worker in the proper category.