What are the main differences between an independent contractor and an employee?



What are the main differences between an independent contractor and an employee?

There are many important differences between an independent contractor and an employee. The way you are classified impacts how much you earn and what legal rights you have, among other aspects of employment.

Employees are typically entitled to health benefits, medical leave, unemployment, social security, Medicare, state disability and workers’ compensation. Non-exempt employees in California are also entitled to a minimum wage, overtime pay, meal and rest breaks. They have more protections under the law than independent contractors but sometimes less flexibility. Employers have control over their employees’ work schedules and working conditions and how they perform their tasks.

Independent contractors may have more freedom than traditional employees in terms of deciding when, where and how to do their jobs. They can take on multiple projects at the same time and accept work on a freelance basis. An employer might hire an independent contractor to work for the company, but that does not necessarily make the contractor an employee.

Independent contractors generally have their own workplace and equipment. Unlike employees, independent contractors are not eligible for minimum wage, overtime, workers’ compensation or protections under certain workplace safety and anti-discrimination laws.

In determining whether a worker is an employee or an independent contractor under California law, a key aspect for consideration is the degree of control a company has over the worker. The state uses the “ABC” test, which consists of three factors used to decide whether a worker should be classified as an independent contractor. The more control the hiring entity has, the greater the likelihood the worker should be classified as an employee.

The distinction between an employee and an independent contractor is not always clear. Many employers may try to take advantage of the ambiguity by incorrectly labeling a worker as an independent contractor.

Being misclassified as an independent contractor when you are an employee is a violation of your rights. For example, if you were misclassified, and you often worked over 8 hours per day or 40 hours per week but were not paid overtime, you could be owed a considerable amount of unpaid wages and penalties.

If you suspect you have been misclassified under California law, contact an experienced employment law attorney. McCormack Law Firm can answer your questions and help you determine your status.

Other Unpaid Wage, Overtime and Commission FAQs:

Schedule your free consultation today: 415.925.5161

Client testimonials

This law firm was the only one to answer the phone out of the 15-20 law firms that I called that day. I had a wrongful termination case and Bryan really took the time to listen and understand what happened in my situation, and he knows the law to a T. – Shanic M.

I was owed wages and overtime and my employer refused to pay me. So I hired them to file a lawsuit. Bryan easily understood my very complicated case and I am happy with the results. – Ebi Z.

I didn’t have to pay anything, the firm took the whole risk of managing the case. Through the 14 months, Bryan always kept me updated, was very responsive and patient to questions I had. We achieved a resolution out of court in my favor, making me even happier about the experience. – Peter S.

I can honestly say that my experience with Bryan was all the way positive from day one… We had very high expectations about our case and in the end we got what we hoped for. – Roger J.

I won my trial and I got more than I expected. Everyone in the office is so nice and helpful. Even after everything was finished I could call a few weeks after and ask questions to make sure I was protected and they are more than helpful. – Husain N.

I never had to pay Bryan anything up front, nor was ever pressured to settle early. We ended up settling morning of the trial. Bryan is a really sharp, aggressive, seasoned attorney and knew the law inside and out about whistleblower cases. – Kyle B.