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When Your Employer Misclassifies You


In a time where employers are utilizing the services of independent contractors to cut costs, employees and independent contractors alike must practice their own due diligence when it comes to their employment classification. Employers often gravitate toward the service of independent contractors because:

  • It allows them to pay flat rates without applying minimum wage requirements or overtime pay;
  • Independent contractors supply their own equipment;
  • They do not have to pay for your insurance; and
  • They do not have to pay payroll taxes.

But when you are an independent contractor and the company you are doing work for starts to treat you as a regular full-time employee, know that you then may qualify for the perks of full-time employment. The employee rights advocates of Brown Kwon & Lam explain.

Examples of Misclassification in New York Employment

One of the perks of being an independent contractor is that you make the rules–you establish the contract with the clients and provide the guidelines for how things will be done. However, some of the most common ways an employer will misclassify and thus, take advantage of independent contractors is bending the relationship, treating the freelance party more so as a full-time employee.

This happens when the employer starts to stipulate the rate of pay, how and where tasks are done, and negotiates opportunities for expanding or contracting that work based on the contractor’s skills, abilities, etc.

In addition, if the employer makes you wear certain uniforms or conform to elements in their employee handbook meant specifically for full-time employees, you may have a claim for misclassification.

You are not alone in the fight against misclassification, there are laws in place which create parameters employers utilizing independent contractors must follow to ensure misclassification does not occur.

Freelance Isn’t Free Act & New York City Human Rights Law

In May of 2017, New York City established the Freelance Isn’t Free Act, which extends protections for freelance workers, specifically the right to:

  • A written contract
  • Timely and full payment
  • Protection from retaliation

In addition, the Act establishes penalties for violations of these rights, such as statutory damages, double damages, injunctive relief, and attorney’s fees.

The state took it a step further in January of 2020 to enhance protections for independent contractors under the New York City Human Rights Law. The updates now include mandates that employers who utilize the services of independent contractors must:

  • Provide annual sexual harassment prevention training if they meet certain thresholds for the amount of work performed, and
  • Those workers are entitled to reasonable accommodations under the NYCHRL.

What can I recover in a New York Employment Misclassification Case?

If you are a victim of employment misclassification in New York, know that you are entitled to compensation. Depending on the circumstances of the case, you may be entitled to:

  • Back pay
  • Compensatory damages
  • Punitive damages
  • Attorneys’ fees and legal costs
  • Employer’s contributions to employee benefits
  • Medical and Social Security contributions; and
  • Unfiled W-2 forms

If it is found that the misclassification was intentional to avoid insurance and tax costs, penalties against the company can range up upwards of 20% of all employee wages and 100% of Medicare and Social Security contributions by both employer and employee.

In extreme cases, the employer may face criminal penalties and prison time.

Know your rights as an independent contractor and be diligent in your record keeping. If you believe you are being misclassified, you need legal support. And Brown Kwon & Lam is here for you.

Misclassification in New York City: Brown Kwon & Lam

When you were hired as an independent contractor, things were supposed to be done by your rules. But when the client starts to treat you like a full-time employee, you need to seek the compensation and benefits that are rightfully earned.

Let the employee rights attorneys of Brown Kwon & Lam review your case. Contact the employee rights attorneys at Brown Kwon & Lam today.