An employee and an independent contractor may do the same or similar work, but there are important differences between them with respect to employment classification.
One major difference is that employees are afforded more protections under state and federal employment laws. Employees may also be eligible for certain employer-provided benefits such as paid sick time, a pension, vacation pay and employer-provided insurance. This is why it is extremely important for employees not to be misclassified as independent contractors.
If you have been misclassified as an independent contractor in Arizona, you may be legally entitled to significant compensation for your losses, and you should speak with an employment law attorney about your rights and options.
A Question Of Control
In general, whether or not a person is an employee or an independent contractor depends on how much control the hiring party has in the relationship with the worker.
If you are an employee, your employer can control or direct what you do at work and how you do your job. For example, you might be required to wear a uniform or use certain language with customers, and your employer might provide certain equipment or tools that you use for your job.
If you are an independent contractor, you control how you do your work, and you generally provide the tools and supplies you need for the job. If a company classifies you as an independent contractor but exerts too much control over how you do your work, you may have been misclassified.
A Question Of Tax Withholdings
If you are an employee, your employer is required to withhold state and federal taxes from your wages or salary.
If you are an independent contractor, you are essentially an independent businessperson, and the party or company that hires you for a job is not required to withhold taxes from your pay.
A Question Of Permanent Or Temporary
If you are an employee, you can expect that your relationship with your employer will continue as a key aspect of the business. As an employee, you should also receive a regular paycheck and be on the employer’s payroll.
If you are an independent contractor, your work for the hiring party is considered to be temporary and not central to the life of the business, and you are not on the hiring party’s payroll. If your relationship with the hiring party is such that you are expected to show up to work for a long period of time, you may have been misclassified.
Some workers are misclassified as independent contractors for years, resulting in extreme losses for those workers. Anyone facing this situation should learn as much as they can about wage and hour laws in Arizona and talk to an employment law attorney about every available option for righting the wrong.