Boss: Congratulations! You’re hired!
Worker: That’s great. What are your benefits?
Boss: Well, you don’t exactly have benefits. You see, you’ll be an independent contractor. You’ll actually work for yourself.
Worker: Does that mean I’ll get to set my own schedule?
Boss: No, you’ll still have to work when we tell you to.
Worker: Does it mean I get to turn down work I don’t want to do?
Boss: No! If you do that we’ll fire your [explicative deleted, this is a family friendly blog].
Worker: Well, what does it mean that I’m an independent contractor?
Boss: It means you’ll get the shaft in a variety of ways. It means you won’t get overtime. It means you might not even get minimum wage. It means you will have to pay your own payroll taxes. And it means I’m saving a [heck] of a lot of money.
While entirely fictional, some form of this conversation plays out daily. Employers save as much as 30% on payroll by misclassifying employees as independent contractors. In 2006, the federal government estimated it lost $2.6 billion in unpaid taxes because employers wrongly classified employees as independent contractors.
How do you know if you’ve been misclassified? Here are some questions to ask yourself.
- Does my employer set my schedule?
- Is my job important to my boss’ business?
- Am I able to work for my employer’s competitors?
- Does my employer buy my tools?
- Does my employer supervise my work?
If you said “yes” to at least two of these questions, your employer may be stealing overtime and other money from you. Are you an employee? Well if you look like a duck, quack like a duck, and have webbed feet, then you probably need to see a lawyer.