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Is my employer misclassifying me as an independent contractor? - II

In a previous post, we discussed how the job market has undergone something of an evolution in recent years, as a significant and growing cross-section of young workers are now choosing to earn a living as independent contractors, wholly embracing the relative freedom afforded by this type of employment.

We also discussed how it's important for those people who may not be entirely certain as to whether they are actually independent contractors to ensure that they are not being misclassified as such by an employer, as it may mean they're being illegally deprived of everything from overtime pay and health insurance to workers compensation and unemployment benefits.

To recap, courts consider three primary factors when determining whether a worker is an independent contractor or employee: the degree of behavioral control exercised, the degree of financial control exercised and the relationship of the parties.

We'll discuss these remaining two factors in today's post.

How does financial control factor into the determination?

A court will look to see whether the facts demonstrate that the employer or the worker had a right to direct or control the monetary aspects of the work being performed. If the latter was found to have such direction or control, then it's likely the worker is an independent contractor.

To illustrate, if the court finds that the worker was not reimbursed for some or any business expenses, and that these unreimbursed expenses were relatively high, it's likely they will be found to be an independent contractor.

Other factors that can lead a court to find that a worker is an independent contractor include the making of a significant, but not necessarily substantial, investment in the work performed, and the ability of the worker to realize a profit or a loss.

How does the relationship of the parties factor into the determination?

A court will look at any other relevant factors that shed light on the relationship between the employer and the worker. Indeed, while a complete lack of benefits really says nothing about the relationship of the parties, the providing of at least some benefits to a worker (paid leave, health insurance, etc.) would tend to suggest the existence of an employer-employee relationship to the court.

Of course, the existence of a contract could also serve to demonstrate exactly what kind of working relationship was envisioned between the two parties.

What all of this really serves to underscore more than anything is that the issue of whether a worker has potentially been misclassified by an employer is exceedingly complex. As such, it's important to consider speaking with a skilled legal professional who can answer your questions, outline your rights and fight to secure that to which you are entitled by law.

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