Long before the COVID-19 pandemic, a shift toward the gig economy was in full swing. Gone were the 40-hour work week, paid vacation, and so many other perks that salaried employees of previous generations enjoyed. An increasing number of businesses have been hiring people who do work for the company as independent contractors instead of as employees. It is much less expensive for employers to have an independent contractor on the payroll than an employee, but it is much more burdensome for the worker. On the surface, being an independent contractor might sound like a sweet deal; it calls to mind images of being your own boss. In practice, though, it means that you pay more taxes and have fewer financial and legal protections. If your employer has categorized you as an independent contractor, but you believe that you qualify for employee status, contact a New Jersey employment lawyer.
The Rights of Employees, as Denied to Independent Contractors
Being an employee is about so much more than getting a paycheck. According to New Jersey law, employees have the right to the following protections and benefits:
- Overtime pay for hours they work beyond 40 hours in a week
- Having the employer pay half of the employee’s Social Security and Medicare taxes
- Hourly pay of at least $12 per hour, as of 2021
- Paid breaks and sick leave
- Workers’ compensation coverage, such that your employer pays for the treatment of injuries you sustain on the job
- Unemployment benefits
The flipside is that all of these benefits that protect employees from economic hardship if they get sick, injured, or laid off represent additional expenses for the employer. Therefore, employers often try to categorize workers as independent contractors even when there is no reason to do so.
What to Do if Your Employer Misclassified Your Employment Status?
If your employer has misclassified you as an independent contractor, it is possible to correct the classification. The simplest way to do this is simply to talk to your employer. You can reference the ABC test, which specifies that all workers should be classified as employees unless they meet specific criteria for independent contractor work. Of course, your employer might refuse to reclassify your employment status. They might try to convince you that they are saving you money on taxes, when actually they are only saving themselves money.
You can also contact the IRS directly. File form SS-8, which lets the IRS decide whether you are an employee or an independent contractor. If the IRS reclassifies you as an employee without your input, that means that the IRS will credit you the Social Security and Medicare taxes you have already paid, but it will make your employer pay them instead. If you are worried about your employer retaliating if you speak up or contact the IRS, then you should consult an employment lawyer early in the process.
Stand Up for Your Legal Rights as an Employee
If you are doing the work of an employee but not being treated as one, an employment lawyer can help. Call our Red Bank office at 732-842-6500, our Marlton office at 856-985-9800, our Newark office at 973-878-9040, or contact us at 888-396-0736 or online for a free consultation.