Over the past few years, there has been a rise in flexible, short-term employment opportunities. This “gig economy” allows workers to earn money independently, not tying themselves to an employer. Some well-known gig economy jobs include Uber and Lyft car services, Wag dog-walking, Postmates and other food delivery services and more.
Companies present these jobs as a win-win. The workers make money on their own schedule and can work as much or as little as they want, and the company avoids the additional tax costs employees bring, as well as other fees.
However, being classified as independent contractors can cause problems for the workers. The law does not require employers to provide seemingly-basic protections, like a minimum wage, potential overtime pay or even workers’ compensation coverage, for independent contractors. Therefore, contractors often lack financial stability and have little to no recourse if they are injured on the job. Meanwhile, the employer continues to save money on taxes and labor costs.
Because of these issues, states have increased scrutiny on the classification of workers. The law defines an employee in a certain way, and a contractor in a certain way, and lots of employers either mistakenly or purposefully misclassify workers to save money. If you are working as a contractor, there is a possibility that you are actually an employee, and should be treated as such.
How to know if you’re actually an employee
If you are a contractor in New Jersey, you should understand the state law regarding the definition of an employee. Under state law, you are automatically an employee if you provide services for money. For an employer to classify you as a contractor, you must meet, or rather not meet, several criteria.
You are an independent contractor if, and only if, you fit every one of the following qualifications:
1. The company does not give direction on how you complete the service, either in your contract or in your actual work.
2. The service you provide is outside the usual course of business of the employer, or you perform it somewhere the employer has no place of business.
3. You are generally a freelancer.
The differences between how a contractor completes their work and how an employee completes their work can be slight. However, the impact of being classified one way or the other can be huge. If you think you have been mistakenly classified as a contractor, and should actually receive the benefits of an employee, you should contact an employment law attorney as soon as possible.