Independent contractors are not treated the same as employees. Independent contractors often receive no overtime pay; enjoy few, if any, protections under federal and state law against unlawful discrimination, harassment, and retaliation; and commonly are ineligible to participate in valuable company-sponsored benefit programs, such as group health insurance, stock ownership, 401(k), or other fringe benefits.
Whether a worker is an independent contractor or a traditional employee continues to be a source a great confusion for Texas employers. Often, the inquiry is fact-intensive. The Texas Labor Board (now known as the Texas Workforce Commission), Internal Revenue Service (IRS), U.S. Department of Labor (DOL), and U.S. Equal Employment Opportunity Commission (EEOC) apply varying standards to determine whether an individual is an employee or independent contractor.
Merely because an employer and a worker agree to an independent contractor relationship does not mean an independent contractor relationship is created. Rather, courts and federal and state administrative agencies look to the employer's right to control the manner and mode of the individual's work and the economic realities of the relationship.
The consequences for an employer's misclassification of an employee's status can be potentially disastrous, including penalties owed to the IRS and TWC for unpaid employment taxes, liability for back wages, and liquidated damages for unpaid overtime, and liability for medical expenses which should have been covered under an employer's group health plan.
Contact a Dallas Employment Lawyer
Dallas employment lawyer Barry Hersh dedicates a significant part of his practice to resolving Texas wage and compensation disputes, including independent contractor misclassification matters. If you would like to schedule a consultation with Barry or you believe that you have been misclassified as an independent contractor, complete the law firm's online inquiry form.