Worker Misclassification is a Big Deal, according to New Jersey Employment Law


Has the employer you work for classified you as an independent contractor? Whether mistakenly or deliberately, being misclassified has dire consequences in the event an at-work accident occurs and you have to file a compensation claim or a claim is filed against the contractor.

If you work for a specific company and have a boss and a set of policies and rules you work under, you are an employee. Of course, even a contractor has to abide by some rules set by the client, but there is a clear distinction in that contractors work for the client while employees work for and only follow orders from the contractor.

Are you an employee or an independent contractor?

Quite a number of people provide services as true independent contractors. They look for the clients themselves, set and negotiate remuneration, determine their working hours, and decide the modus operandi they will employ for the task. Employees do not possess these powers. If they have to negotiate with the client, it would have to be through the contractor they are working for. Pay is likely to be constant too regardless of the difference in proceeds from the various tasks they are assigned.

One obvious upside to being an employee is that you enjoy many rights that contractors do not have. Basically, if you are erroneously classified as an independent contractor, you will be exposed to the risks of being one and not necessarily the benefits. For instance, tech workers misclassified as independent contractors may not decide their pay but they would potentially face a lawsuit if something goes wrong during the project.

Why classification matters

If you are mistakenly classified as a contractor instead of an employee, you have been set up to wrongfully miss out on quite a number of privileges. You may not be entitled to overtime pay, tax payments, health benefits etc.

Independent contractors cover all the costs associated with the running of their businesses. Employees, on the other hand, only work by the job description provided by their employer and may be entitled to the following:

  • Overtime and minimum wage
  • Workers’ compensation coverage
  • Unemployment compensation for when they are given their cards due to the employer’s or someone else’s fault
  • Payments towards their Medicare and Social Security accounts
  • Health insurance

What to do if you are classified as an independent contractor rather than an employee

Misclassification lawsuits can be difficult to maneuver alone. If you have been wrongly classified as an independent contractor and your employer is not willing to listen to your complaint, consider hiring a seasoned Newark employment law attorney to help get the mistake corrected.

The Department of Labor and courts use the economic realities test to determine if one is truly an employee or an independent contractor. The economic realities test assesses job duties, levels of instructions, worker’s powers in project execution, where a worker performs their work, and much more. The analysis is clearly complex and you may need a legal expert to casually take you through the test before proceeding with a lawsuit.