What is the Difference Between Employee Work and Independent Contract Work?

The misclassification of independent contractors has been all over our state news. Recently, the state government mandated that all gig-applications like Uber and Lyft must reclassify their independent contractor drivers as employees, which caused both rideshare companies to push back in a significant and dramatic way. 

Misclassification is a huge problem that hurts thousand, if not millions of workers every year. In order to know whether or not you have been misclassified, it is important to understand the difference between employee work and independent contractor work; and why a company may choose to classify people as independent contractors, even if it is legally dicey. 

Below is a summary of the conditions that must be met to legally classify someone as an independent contractor, followed by the benefits employers receive if they work with a team of independent contractors. Understanding your role within a company and how you are classified is the first step in understanding if you have been misclassified. 

Conditions for independent contractor work:

• The independent contractor must have full control over how they perform their job duties. The company cannot intervene and direct the independent contractor. 
• The independent contractor may not be trained by the employer. The implicit understanding is that the independent contractor brings specialized expertise to the table, and therefore should not receive training from the company they are providing service for. 
• The independent contractor is free to work for other companies and other clients. 
• The independent contractor performs a duty that is not a fundamental part of the company’s business. For example, an independent contractor can legally provide HR services to a marketing agency.

How the company benefits from a workforce of independent contractors:

• Flexibility to scale their workforce up and down on short notice. 
• Reduced exposure to lawsuits since employees have a slew of rights that independent contractors don’t enjoy.
• No risk of union formation.
• The company saves money on unemployment insurance, worker’s compensation insurance, and social security.

If you believe you have been misclassified based on your job duties and/or your employer’s desire to reap the benefits of an independent contractor workforce, then reach out to Para Los Trabajadores today. We can help you stand up to your employer and secure the employment you deserve.