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California Labor & Employment Attorneys > California Labor & Employment Lawyer > California Employee Misclassification Lawyer

California Employee Misclassification Lawyer

Many employers are honest and take great pains to ensure that their employees are paid a good wage and have access to health insurance and other benefits. Unfortunately, not all employers are so scrupulous and in an effort to avoid paying for workers’ compensation insurance or other employment-related taxes, go to great lengths to classify their employees as independent contractors, who are not owed the same level of benefits. Sometimes, the misclassification may be unintentional. Either way, misclassification of an employee can have devastating consequences for employees who believed that they were covered by labor laws and workers’ compensation, so if you recently discovered that your employer has not been paying you or offering you the proper benefits, it is important to contact an experienced California employee misclassification lawyer who can help protect your interests

Misclassification may not come in the form of employee versus independent contractor. Many employees are misclassified by their employers as “exempt” employees under the federal and state overtime laws – resulting in denial of overtime pay to those employees. If you believe you may be wrongfully classified as an exempt employee under either state or federal laws or if you have not received overtime wages to which you believe you are entitled, contact our California employee misclassification lawyers today for a consultation.

Independent Contractors

Employers owe very different duties to independent contractors than they do to employees. While it can be difficult to differentiate between the two, California courts have created a series of factors to help establish whether an individual is an employee or an independent contractor, which include an analysis of:

  • Who controls the worker’s manner and means of performing his or her duties;
  • The skill required to complete the worker’s job;
  • Whether the worker is engaged in a distinct business or occupation;
  • Whether the work is completed under supervision;
  • Whether the worker can be discharged at will or for cause;
  • Who supplies the worker’s tools and materials;
  • The length of time it takes to complete the services;
  • Whether the worker is paid by time or by the job;
  • Whether the work is integral to the employer’s business; and
  • Whether the parties believe that they have created an employer-employee relationship.

Workers who provide their own supplies, complete jobs quickly, do not perform work that is integral to an employer’s business, do not work under supervision, are highly skilled, and control how they perform their own duties are more likely to be independent contractors. On the other hand, workers who can be discharged at will, are paid by time rather than per task, take a significant amount of time to complete their duties, and complete work that is integral to someone else’s business are more likely to be employees.

Benefits and Protections

Once a worker has been labeled an employee, he or she is protected by labor laws and is eligible for workers’ compensation benefits. In an attempt to save money on insurance policies and taxes, some employers claim that an employee is actually an independent contractor. This can result in an employee being denied access to critical benefits and protections, such as the minimum wage, overtime compensation, family and medical leave, and safe workplaces. A misclassified employee may also:

  • Become ineligible for unemployment benefits;
  • Be ineligible to receive workers’ compensation benefits if injured on the job;
  • Not have right to sick pay, rest breaks, overtime pay, or a minimum wage;
  • Be ineligible for health care coverage as an employee; and
  • Have to pay all Social Security and Medicare taxes out of pocket.

Importantly, while classification as an independent contractor may deprive those workers from protections under many employment law claims – like discrimination claims – the California Fair Employment and Housing Act extends protections against harassment to workers even if they are independent contractors.

Exempt Employees

Both state and federal laws provide for payment of overtime wages to non-exempt employees. However, often times, individuals may be improperly classified as exempt employees and otherwise lose out on overtime payments to which they are owed.

Under California law, exemptions from statutory mandatory minimum wage and overtime provisions are narrowly construed. Exemptions which are recognized under both state and federal law include:

Under California law, exemptions from statutory mandatory minimum wage and overtime provisions are narrowly construed. Exemptions which are recognized under both state and federal law include:

  • Administrative exemption – exempt from both minimum wage and overtime provisions of California law.
    1. An administrative employee must also earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. In California, full-time employment means 40 hours per week.
    2. Employees fitting this test are typically exempt under the administrative exemption and are defined by the Labor Commissioner’s Office as an employee who conducts:
      1. The performance of office or non-manual work directly related to management policies or general business operations of his or her employer or his or her employer’s customers, or
      2. The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; and
      3. Who customarily and regularly exercised discretion and independent judgment; and
      4. Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity, or
      5. Who performs, under only general supervision, work along specialized or technical lines requiring special training, experience, or knowledge, or
      6. Who executes, under only general supervision, special assignments and tasks, and
      7. Who is primarily engaged in duties which meet the test for the exemption.
  • Executive exemption – exempt from both minimum wage and overtime provisions of California law.
    1. An executive employee must also earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. In California, full-time employment means 40 hours per week.
    2. Employees fitting this test are typically exempt under the executive exemption are defined by the Labor Commissioner’s Office as an employee who:
      1. Primary duties: the employee’s duties and responsibilities must involve management of the enterprise, or of a customarily-recognized department or subdivision.
      2. Discretion and judgment: the employee must customarily and regularly exercise discretionary power and independent judgment.
  • Professional capacity exemption – exempt from both minimum wage and overtime provisions of California law.
    1. A professional employee must also earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. In California, full-time employment means 40 hours per week.
    2. Employees fitting this test are typically exempt under the professional capacity exemption are defined by the Labor Commissioner’s Office as an employee who:
    1. Who is primarily engaged in an occupation commonly recognized as a learned or artistic profession. “Learned or artistic profession” means an employee who is primarily engaged in the performance of:
      1. Work requiring knowledge of an advance type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, or work that is an essential part of or necessarily incident to any of the above work; or
      2. Work that is original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination, or talent of the employee or work that is an essential part of or necessarily incident to any of the above work; and
    2. Whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical, or physical work) and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.
    3. Who customarily and regularly exercised discretion an independent judgment in the performance of duties set forth above.
    4. Who earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. Full-time employment means 40 hours per week as defined in Labor Code Section 515(c).

If you believe you may be wrongfully classified as an exempt employee under either state or federal laws or if you have not received overtime wages to which you believe you are entitled, contact our California employee misclassification lawyers today for a consultation.

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* Cathleen Scott is licensed to practice in Florida only.

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