People do not always consider whether they are an employee or an independent contractor, but there are important legal differences between the two. Today, more and more people are entering into temporary or contract work, and the lines between the two types of workers can become blurred. Whether you are classified as an independent contractor or an employee will affect your income, taxes, eligibility for certain benefits, and more. Workers classified as independent contractors usually receive a 1099 tax form each year, while workers classified as employees receive a W-2 tax form each year. Below are a few of the most important distinctions between independent contractors and employees.
The Fair Labor Standards Act (FLSA) outlines certain rights for employees. For example, employees are guaranteed a certain minimum wage, as well as overtime pay when they work over 40 hours in one work week. Independent contractors on the other hand are not employees and therefore, have no right to overtime or minimum wage under federal or state laws. They typically enter into a contract with a company that determines the amount of pay for the services they provide. Proper classification is also important because certain benefits are available to employees, but not necessarily to independent contractors. The contract between a company and the independent contractor determines the benefits received.
There is no exact rule to determine whether a worker is an employee or an independent contractor. However, the IRS has factors to help determine the proper classification. Some of the most common factors that the IRS and courts consider include:
If you feel as though your employer has misclassified you our Columbus employment lawyers at Marshall Forman & Schlein LLC are here to help. We can help determine if you may be classified correctly, and if not, work to help you obtain wages lost and pursue other available legal remedies. Call us today or contact us online so we can discuss whether you may have a potential case.
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