WHAT ARE THE BENEFITS AND DOWNSIDES OF BEING CLASSIFIED AS AN EMPLOYEE VERSUS AN INDEPENDENT CONTRACTOR?
Workers may be classified into two general legal categories: employee and independent contractor. The distinction between the two is really important. A worker, such as a painter, who provides unsupervised, specialized work that is needed only irregularly, is a clear-cut example of an independent contractor.
Frequently, the worker is trying to claim the status of “employee” to qualify for the legal protections and employee benefits given to employees. At the same time, the employer is seeking to classify the worker as an independent contractor.
From the employer’s standpoint, considerable money can be saved by classifying a worker as an independent contractor. A business that hires an independent contractor does not have to provide workers’ compensation insurance, unemployment compensation, overtime, or job benefits. Further, it does not need to pay state and federal payroll taxes for the worker. More importantly, when an independent contractor is hired, the employer is not required to pay any part of the contractor’s Social Security and Medicare taxes.
The Law Offices of Payab & Associates is a Los Angeles based law firm with more than 17 years of experience in employment cases. Our office has successfully litigated many complex disputes including wrongful termination, sexual harassment, racial discrimination, wage and labor disputes, and retaliation cases.
Contact the Law Offices of Payab & Associates @ (818) 918-5522 or visit http://payablaw.com/ if you have any questions regarding your rights at the workplace.