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Are you SURE Your Paycheck is Right?

Are you SURE Your Paycheck is Right?

California Workers Misclassified as Independent Contractors.

Two Hundred dollar bills on top of two paychecks on a table

While employers are cutting many costs by designating their employees as Independent contractors,the IRS and the state of California is busting them for the misuse of the law. Employers are depriving workers of their basic rights by misclassifying them as Independent contractors and using this in their own favor to avoid tax payments, compensation benefits given to the workers and not paying overtime to the employees.
The IRS is taking keen interest in this situation because it is benefiting both the Government that is facing monetary shortages and the employee who is being disadvantaged of his benefits.

The Government benefits because the tax shortfall created by making false classifications of the employee as independent contractor are funds that they need and employee is being restored with his rights too such as overtime etc.
There are many federal laws and state laws that are trying to make sure that employee is not misclassified. One thing common to both State and federal laws, they agree on the definition of employee which is the basis, and according to the law an employee is a person whose actions and results of the work are controlled by some contractor, in other words, the way we can say that he is being supervised and directed by the contracting person.
In continuance of understanding whether the person is an independent contractor an employee a 20-factor test is developed that tells the controlling power of the contracting person. These three components are brought forward by the IRS and social security administration.
Behavior control: this determines how much control the worker has over the accomplishment of the task assigned.
Financial control: how much of a role is played by the worker to control the business aspect of the project?
Relationship of parties: what do both the parties consider their relation to be?
California Labor Code and California Tax Code have many laws to determine the classification of the worker. When it comes to the enforcement of the wages and working hours, the Division of Labor Standards Enforcement (DLSE) make the worker go through “economic realities” test which shows clearly the amount of control of the worker possesses.
If you feel like you are being denied your labor rights by using the misclassification we want to hear from you, United Employees Law Group can help.


Photo Credit: Shutterstock/ Billion Photos

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