Employees can be misclassified in two major ways: independent contractor versus an employee; and misclassification of exempt employee status (salary or hourly). If an employer has misclassified an employee as an independent contractor, or a non-exempt employee as an exempt employee, the potential exposure for unpaid wage can be significant, and you are entitled to damages.
Independent contractors are not employees. The protections of the California Labor Code do not govern independent contractor relationships. Employers in California have a history of purposefully misclassifying positions that should be employees as independent contractors to avoid paying them minimum wage, overtime, and providing meal and rest periods among other California Labor Code requirements. Depending on your industry, there are two different "tests" that are used to determine what the correct classification of your position is.
It is not enough that both parties agree that the work relationship will be limited to an independent contractor relationship. There are various tests in state and federal courts for determining when an employer-employee relationship exists, but generally it comes down to the amount of control the employer can exercise over the worker. These tests can be confusing as it gets down to the interpretation of your essential job duties and sometimes every single aspect of your job down to the graphics that are on your shirt.
Federal and state laws requiring the payment of overtime do not apply to employees who have been properly classified as exempt. To be properly classified as exempt in California, an employee must be paid on a salary up to a certain amount that increases periodically and be primarily engaged in duties that meet the test of the exemption. Typically, a salaried employee must truly supervise two or more employees to be considered an exempt employee on top of the other requirements.
If a non-exempt employee has been incorrectly classified as exempt, he or she may be entitled to unpaid overtime, meal and rest period penalties and other Labor Code penalties. Employers will often consider you to be an exempt salaried employee, and deny you your rights to overtime, lunch breaks and rest breaks. This practice continues to go on, especially with high level assistants in white collar industry. Just because you are paid a very high salary or are an assistant to a C-suite executive does not mean you meet the primary duties test and thus, you should be entitled to overtime for the qualifying hours you work.
If you believe you have been inappropriately classified as an Independent Contractor or Salaried Employee when you should be entitled to overtime, lunch and rest breaks, contact our office for a FREE consultation.