Independent Contractor Misclassification

Independent Contractor Violations

Most workers are employees, but many employers try to deny this fact and designate them as independent contractors instead. Employers have big incentives to misclassify their workforce as independent contractors in order to avoid paying overtime, payroll taxes, benefits, and workers’ compensation costs. These actions are illegal.

The courts look to the economic realities of these arrangements to determine whether a worker treated as an independent contractor is really an employee. The existence of an “independent contractor” agreement does not magically make an employee an independent contractor. What matters instead is whether a worker is economically dependent on a single employer or whether they are truly an entrepreneur in business for themselves.

The Fair Labor Standards Act allows employees to sue for two years’ worth of damages. However, where the employer is guilty of bad faith, employees can collect damages for the last three years and liquidated damages (i.e., double the amount the employee was harmed).

The North Carolina Wage and Hour Act repeats these same requirements, but generally defers to federal law on overtime and minimum wage claims.

We have held employers responsible and obtained fair compensation for our clients when these employers push the envelope in misclassifying their employees. If you believe you have been misclassified, you should reach out for a consultation today.

Reach out for a consultation today.