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Does it matter if I’m an employee or an independent contractor?

On Behalf of | Apr 12, 2023 | Employment Law |

Relationships between workers and employers in New York are sometimes employer-employee relationships while other times the worker is an independent contractor. This classification is important, as it can affect the rights the worker has and the obligations the employer must meet.

What constitutes an employer-employee relationship?

An employer-employee relationship generally exists when the employer chooses the manner and means of how the job is done and has ultimate control over the results of the task or project.

When is a worker an independent contractor?

Not all working relationships are employer-employee relationships. Sometimes a worker is an independent contractor. Independent contractors are in business for themselves, and employers do not supervise their work, direct their work or control how they complete their work.

Why does it matter?

It matters whether a worker is classified as an employee or an independent contractor.

Employers cannot violate anti-discrimination and wage and hour laws as they apply to employees. These laws do not always apply to independent contractors.

Employers are responsible for withholding federal income tax, Social Security and Medicare taxes from an employee’s wages. Independent contractors, on the other hand, pay self-employment taxes.

Employees can seek unemployment benefits if they are let go through no fault of their own. Independent contractors cannot seek unemployment benefits if they are out of work unless they were misclassified.

So, while independent contractors enjoy the freedom of being their own boss, they do not enjoy all the protections afforded to employees under the law.

Sometimes an employer purposely misclassifies a worker as an independent contractor to skirt the legal obligations they have towards employees. If so, the worker can pursue their rights to fair treatment at their job and the compensation afforded to them.