Texas Independent Contractor Misclassification Attorney

Some factors that indicate independent contractor status under the federal Fair Labor Standards Act include: 

• The individual controls how the work is to be accomplished and works with little supervision or direction;
• The individual has made significant investments in the business;
• The individual has a significant opportunity for profit or loss depending on how they manage their business;
• The nature of the work requires a unique skill set or exercise of significant initiative within the business; and
• The individual works for many different companies and for relatively short periods at a time.

On the other hand, factors that indicate employee status under the federal Fair Labor Standards Act include:

• The individual is subject to relatively close control and supervision by the employer;
• The employer’s investments in the business are much more than the individual’s investments;
• The individual has little opportunity for profit or loss because the employer controls the schedule and pay;
• The individual works for the same company for an extended period;
• The nature of the work is routine, even if specialized, and does not allow much initiative within the business; and
• The work is an integral part of the employer’s business.

This area of law is very complex. In most cases, some factors point one direction while other factors point another direction, making it difficult to predict how a case may come out. Some states use different tests under their state overtime laws that are more likely than federal law to result in finding employee status.

Consequences for Independent Contractor Misclassification

When a worker is misclassified as an independent contractor instead of an employee, it can have negative consequences for both the worker and the employer. The worker may be denied certain employee benefits, such as healthcare, retirement plans, and workers' compensation insurance, and may be responsible for paying their own payroll taxes. Additionally, they may not be covered by certain labor laws that protect employees.

Employers who misclassify workers as independent contractors may face legal and financial consequences, including fines, penalties, and back pay for taxes and benefits owed to the misclassified workers. Furthermore, they may face lawsuits and damage to their reputation.

How do I Report Independent Contractor Misclassification?

If you suspect that you have been misclassified as an independent contractor, it is important to report the misclassification to the relevant government agency. The agency will investigate your claim and determine whether your employer has violated any labor laws.

In the United States, the Department of Labor (DOL) and the Internal Revenue Service (IRS) are responsible for investigating independent contractor misclassification. The DOL enforces misclassification under the Fair Labor Standards Act (FLSA), while the IRS investigates misclassification under tax laws.

To report independent contractor misclassification, you can reach out to the DOL's Wage and Hour Division or the IRS. It is also advisable to consult an employment lawyer who can guide you on your legal rights and options.

Schedule a Free Case Review with our independent contractor misclassification lawyers by calling (888) 333-7147 or contacting us online. We offer our legal services in English and Spanish.