At Joseph & Norinsberg, we help employees vindicate their rights under New York state and federal law when they’ve been discriminated against, harassed, or not paid the wage that they are entitled to. Though every case is different, there are a number of issues and questions that arise frequently. One of those is: Does it matter whether I’m an employee vs independent contractor? The short answer is: Yes, this is a crucial distinction in employment cases.
Why the Employee Vs Independent Contractor Distinction Matters
The distinction between employee and independent contractor is most often thought of as relevant to tax obligations – and it is. However, the distinction is also crucial in determining whether an individual can bring a lawsuit for wage and hour violations or employment discrimination based on race, age, gender, color, religion, sex, national origin, or other protected class. Under New York and federal laws, only employees are protected and thus, only employees can bring suit for these types of violations. New York City is a notable exception within the state of New York, as it protects independent contractors from discrimination.
How Courts Decide
Under New York and federal law, courts are more concerned with substance than form in determining whether a person is an employee vs independent contractor for purposes of employment discrimination or wage and hour claims. In other words, the fact that a person receives a 1099 form for taxes or is called an “independent contractor” by a business does not necessarily mean that they are an independent contractor. How courts make this determination involves weighing a number of factors. The evaluation process is similar but not identical under New York state and federal law.
Under federal law, courts apply the economic realities test, which focuses on whether the individual is financially dependent on the employer. If they are, they are an employee, regardless of title or agreement. If they are not, then they are an independent contractor. In making this determination, courts try to evaluate the relationship as a whole, evaluating any relevant factors, including how much control the business has over the worker, how important the work performed is to core business operations, whether the worker has discretion in how they perform their duties, whether the relationship is permanent and indefinite or for a fixed period of time or project, and whether the worker has his or her own supplies and employees. Courts are free to take into account other relevant factors and no single factor is determinative.
New York law is similar, but focuses more on the amount of control the business has over the worker’s conduct. Factors considered include whether the employee is able to perform work for other businesses, whether the worker is on the business’s payroll, and whether the worker is required to work certain hours at a set location. Like the employee-independent contractor analysis under federal law, courts applying New York law will look at the situation as a whole and are not limited to these factors.
Your Employment Law Case
Whether you are an independent contractor employee is just one of the many issues that may arise in your New York or federal employment discrimination or wage and hour case. The attorneys at Joseph & Norinsberg have experience navigating these issues to help employees obtain successful outcomes. Contact us today at [email protected] or by calling 212-JUSTICE to discuss your options.