Q: After coronavirus hit, my employer changed a dozen of us to contractor status. None of us understood why or what it would mean. At first it seemed like a good thing as we wound up with more cash every payday without payroll taxes coming out of our checks.
My employer then applied for and got government bailout money. As soon as that happened, we all got canned. We later learned employers can fire contractors without being in violation of the loan terms.
Initially, my family and I were able to get by on unemployment, but then our car went on the blink, and we had other unexpected expenses. We’re now surviving on handouts; I’m standing in line at food banks to feed my kids. The food I’m given feeds my family but eats my dignity. Is what my employer did legit?
A: Possibly not. If your employer simply relabeled multiple employees as contractors without changing their job duties, your employer may run afoul of both the Department of Labor and the Internal Revenue Service.
Contractor versus employee status is a big deal, particularly now with so many furloughed, laid off or fired employees working in the gig-economy as independent contractors. Employers don’t need to pay independent contractors minimum wage, overtime or provide them with the benefits of employees.
FisherBroyles management-side employment attorney Eric Meyer notes that employers can easily misclassify employees as independent contractors. According to Meyer, seven of the most significant factors in determining whether a worker is an employee or independent contractor include “the extent to which the services rendered are an integral part of the principal’s business; the relationship’s permanency; the amount of the worker’s own investment in facilities and equipment; the employer’s nature and degree of control; the worker’s opportunities for profit and loss; the