How a company classifies its workers can have major legal and financial implications. Businesses often try to classify as many workers as possible as independent contractors, since doing so reduces their obligations under state and federal employment laws. However, being labeled an independent contractor means you have fewer legal protections and benefits than a traditional employee. For example, companies generally are not required to provide independent contractors with workers’ compensation insurance, unemployment benefits, or overtime pay under wage and hour laws.
A Classification as an Independent Contractor Is Not Absolute
Employers cannot simply choose to label a worker as an independent contractor based on convenience or cost savings. In New Jersey, the law clearly defines who qualifies as an independent contractor. This determination is based on the nature of the working relationship and not on how the employer chooses to classify the worker. Employers bear the burden of proving that a worker meets the legal requirements to be considered an independent contractor.
In New Jersey, the ABC test is commonly used to evaluate worker classification. Under this test, a worker must meet all three of the following criteria to be legally considered an independent contractor: (A) The worker is free from the employer’s control and direction when performing their job duties; (B) The work performed is outside the usual course of the employer’s business; and (C) The worker is customarily engaged in an independently established trade, occupation, or business. If the worker fails to meet even one of these criteria, they should be classified as an employee and receive the full protections of employment law.
You Can Sue Your Employer if You Have Been Misclassified
If you were misclassified as an independent contractor and denied benefits such as overtime pay or workers’ compensation, you have the right to file a lawsuit against your employer. You may be entitled to recover unpaid wages, back pay, and other compensation you would have received if you were properly classified as an employee. Courts can overturn an employer’s classification if it is found to be inaccurate or deceptive.
Misclassification often comes to light when a worker is injured and denied workers’ compensation or when they try to claim unemployment benefits and are told they are ineligible. If the court determines that you were actually an employee, you could be retroactively entitled to all benefits and protections that employees are legally guaranteed.
Your Right to Sue for Discrimination Also Depends on Your Classification
Worker classification is also critical in employment discrimination cases. Employees are protected from discrimination under New Jersey and federal law, while independent contractors generally are not. If your employer argues that you are not entitled to bring a discrimination claim because you were an independent contractor, a court must first decide whether that classification was correct.
In discrimination cases, New Jersey courts may go beyond the ABC test and apply what is known as the Pukowsky test. This is a more in-depth, fact-specific analysis of the employment relationship. Before your discrimination claim can proceed, you must present evidence showing that your actual working conditions and duties align more closely with those of an employee rather than an independent contractor.
Hiring an Attorney for Misclassification Claims
Worker misclassification claims are complex and fact-driven. You will need to provide evidence of the real nature of your job duties, how much control the employer exerted over your work, and whether you operated independently or as part of the company’s core business. An experienced employment attorney can help you build your case, present the correct legal arguments, and seek the compensation you deserve.
Contact the Cherry Hill Employment Lawyers at Burnham Douglass
If you believe you’ve been misclassified as an independent contractor, the Cherry Hill employment lawyers at Burnham Douglass can help. We have experience handling misclassification, wage and hour violations, and discrimination cases throughout South Jersey. Schedule a free consultation by calling us at 856-751-5505 or filling out our online contact form. We have offices in Marlton and Northfield and represent clients across South Jersey, including Marlton, Evesham Township, Cherry Hill, Camden County, Burlington County, Northfield, and Atlantic City.