The unemployment rate is one of the factors economists use to determine the health of the market. When more people are working it historically means that companies are prospering and the economy is getting stronger. Currently, the unemployment rate is down in Los Angeles and Orange County according to a recent news article from the Los Angeles Daily News. While this is generally good news, new issues arise as our economy has largely shifted into what has been termed an on demand economy.
This sounds like a good thing, but there are ways companies can use this newer model to take advantage of employees and not provide them with all of the wages and benefits to which they are rightfully entitled. This is often done through what employment attorneys call employee misclassification. As our Orange C0unty employee misclassification attorneys can explain, an employee who works on an hourly basis is generally entitled to no less than the state and local minimum wage as well as certain benefits required by state and federal labor laws. On the other hand, a contractor is not an employee and is not entitled to overtime pay or any benefits unless the contract specifically provided for such benefits.
Many people think of a contractor as someone who does repairs to a home or works on the construction of new buildings. While this is an example of a contractor in many cases, there are many other types of contractors. However, since most people are familiar with a home improvement contractor, we can use one as an example.
When you want to put a new garage on your home, you call a contract and get him or her to come over and give you an estimate. You will typically pick the materials and decide on how the job should look and the costs, and then if you hire the contractor, he or she will have their crew come over and do the job. You will not be there supervising every aspect of the construction process. You will not be training the contractor on how do the job and you will not be providing the tools. In other words, you are paying someone to do the job and that is all. When they are done, or even while they are working on your garage, they may being working on jobs for other clients. You do not have to pay the contractor by the hour and do not have to pay overtime.
Now let’s look at the laborers. If they were hired by using a new app to find labor and were provided with tools and trained to do the job, they would likely be employees. They are paid by the hour and will be entitled to overtime if they work more than 40 hours a week. The employer will have to withhold taxes and provide a W2 at tax time instead of a 1099.
The problem occurs when the employer tries to claim his or her hourly employees are really independent contractors and not provide any of these benefits and pay overtime. This is known as misclassification of an employee and may be a violation under California labor law depending on the actual circumstances in the case.
Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 949.375.4734.
Unemployment drops in LA and Orange counties, November 17, 2017, By Los Angeles Daily News
More Blog Entries:
New Job Report Sheds Light on the California Job Market, August 12, 2017 by Employment Lawyer Blog