Independent Contractors or 1099 Workers
Employment laws apply very differently to people who are independent contractors versus full-time employees. Most importantly, the law decides whether someone is a contractor or an employee. Generally, the employer’s intent remains irrelevant. The nature of the relationship between the two parties determines whether someone is an employee or an independent contractor.
What is the difference between an independent contractor and an employee?
Legal rights between an independent contractor and an employee vastly differ.
Among other benefits and protections, an employee is entitled to:
- Minimum wage;
- Discrimination protections;
- Overtime;
- Labor laws; and
- Coverage under unemployment benefits.
Example: Widget Corp. hires John as an independent contractor, but the nature of their relationship is actually employer-employee, not independent contractor. John then works 50 hours in a week, and the employer does not pay him over time. In doing so, the employer unwittingly violated wage and overtime laws.
How do I know whether I am an independent contractor or an employee?
Most laws (I.e. wage laws, discrimination laws, etc.) have a slightly different definition of what constitutes an employee. The laws often weigh factors that consider how the employee and employer interact. However, the tests tend to focus on the extent the employer can exert control over the worker.
Examples of “control” may include the employer controlling:
- The worker’s hours;
- The worker’s location;
- Deadlines; and
- How the work is done.
What is the difference in unpaid wages between an independent contractor and employee?
Independent contractors whose wages are not paid may sue the person who hired them under contract theories of law. Employees may sue employers who do not pay them under State and Federal wage laws. Though both laws can provide for payment, they have meaningful legal differences.
Example: A breach of contract suit allows for recovery (getting money back) based on the terms of the contract while a suit for wages under wage laws uses State and Federal laws for recovery, and generally a contract is irrelevant.
Schedule a consult with me, a Sugar Land employment lawyer.
If you are an independent contractor and have not been paid your wage, contact me to schedule a consultation. As always, there are deadlines for taking legal action, so time is of the essence.