Coyle Browne Law


Am I Wrongly Classified at Work?

Correct job classification plays a crucial role in the employment world, shaping how both employers and employees define roles within an organization. The way a job is classified determines many things, like applicable wage rates, benefits entitlements, tax obligations, and even legal protections offered to workers under state or federal labor laws.

Unfortunately, job misclassification occurs surprisingly often; this can lead to severe consequences for everyone involved. From the employee’s perspective, being wrongly classified could mean missed wage opportunities or crucial employment rights. On the other hand, for employers, it not only exposes them ethically but opens up significant potential legal liabilities that might include back-pay and penalties.

Recognizing if you’re wrongly classified at work is incredibly important.

Types of Classification

Recognizing if you’re wrongly classified at your job is crucial as it directly affects your wages, benefits, and employment rights. Here are some common classification categories that often come under scrutiny:

Independent Contractor vs Employee

A significant distinction in the workplace is whether you’re considered an employee or an independent contractor

Employees usually have stricter work schedules and less control over how they accomplish tasks. However, they may access company-provided benefits like health insurance or paid time off.

Independent contractors typically have greater flexibility in terms of schedule – they can usually perform the agreed upon work however they’d like as long as it’s completed according to their contract – but fewer protections since they technically work for themselves.

To determine whether someone is an independent contractor or an employee, California uses a strict three-part “ABC test” that was first articulated in the 2018 California Supreme Court decision Dynamex Operations West, Inc v. Superior Court of Los Angeles, and later codified into statute under Assembly Bill 5 in 2020, commonly referred to as simply “AB 5.” Under the ABC test, an individual is presumed to be an employee, unless the hiring company can prove that the worker:

  • Is free from control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in actually doing the work;
  • Performs work that is outside the usual course of the hiring entity’s business; and
  • Is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.

Failure to satisfy each of the three elements will result in an individual being classified as an employee.”

If you’re an employee who is being improperly classified as an independent contractor, this is problematic because you could be missing out on significant benefits.

Exempt vs Non-Exempt

Another essential classification in the workplace deals with whether an employee is considered exempt or non-exempt – directly affecting their eligibility for overtime pay.

Non-exempt employees are eligible to receive above their normal pay rate for any hours worked beyond 40 per week or 8 per day

On the other hand, exempt employees aren’t due such overtime compensation. They typically occupy roles classified as executive, administrative, professional, or some sales positions which fulfill certain criteria that makes them exempt from overtime.

If your employer improperly classifies you as exempt, this could open up a valid legal claim due to unpaid wages.

Signs You May Be Misclassified

Being aware of possible indicators that you’ve been misclassified assists in analyzing if your rights are potentially being violated. Here’s what you need to look out for:

Pay Discrepancies

If you believe laws and/or agreements entitle you to overtime, but you haven’t been receiving it, you may be a victim of misclassification. For example, if you are paid hourly and do not have any executive duties but aren’t being paid overtime, you should strongly consider that you are being misclassified. 

Being Treated Differently Than Others in The Same Position

If you’re not receiving benefits that other employees in similar roles are getting – like health insurance, retirement plans, paid vacation, or sick days, then there might be an issue with your job classification. This difference could indicate that you’ve been labeled as an independent contractor instead of being rightfully classified as an employee. 

Restricted Freedom

One of the characteristics associated with independent contractors is having a high degree of autonomy and freedom in their work. If you are classified as an independent contractor but find your employer dictating when, where, and how you perform your tasks, this could potentially signify that you’re being misclassified. True contractors typically have control over these areas instead of taking instructions from the business they’re contracted to.

Ultimately, the best way to determine if you’re being misclassified is to speak with an experienced employment law attorney in San Diego about your specific circumstances. For help, contact us today to schedule a free consultation.

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