Working as an independent contractor can have many benefits. You can decide what work to accept, largely control your schedule, and make other decisions regarding how you earn a living. However, there are some drawbacks to being an independent contractor, such as you will not qualify for unemployment benefits if you lose a job unless you personally pay into the state unemployment fund, which many independent contractors do not do. However, what happens if your employer claims you were an independent contractor when you believed you were an employee?
Some employees will try to classify employees as independent contractors in order to avoid paying for employment taxes, health benefits, workers’ compensation, and unemployment. Companies can certainly choose to hire independent contractors to perform labor. However, in some situations, individuals may be misclassified and lose out on benefits to which the law entitles them.
With the Missouri state unemployment rate at 3.1 percent and 23,668 initial unemployment claims filed in a recent month, losing a job is a concern whether or not you are an independent contractor. If you are not eligible for unemployment benefits and believe your employer misclassified you as an independent contractor, you should not wait to speak with an experienced unemployment attorney.
Independent Contractor versus Employee
Employers do not simply get to choose how to classify workers. Instead, both the Department of Labor (DOL) and the Internal Revenue Service (IRS) have guidelines for the classification of independent contractors vs. employees. While each case should be evaluated on an individual basis, there are certain factors that help determine proper classification:
- Behavioral control – The type and extent of instructions an employer give that the worker must follow, including when, how, and where to perform the work. Fewer instructions lean toward independent contractor status, while more control can mean you are an employee.
- Financial control – Who pays for the equipment, tools, and other materials needs to complete the work? If you are an employee, you likely allow your employer to provide what you need to do your job. Independent contractors usually provide their own tools. In addition, independent contractors can decide what jobs to accept and for what payment and they usually work for more than one company. Employees usually work for one company and receive regular pay no matter what the job entails.
If a company hired you for one specific job, you may be an independent contractor. However, if you repeatedly complete work for one company on the company’s terms, they may exercise enough control over you that you should be an employee. You may be able to challenge your independent contractor classification to be eligible for unemployment and other benefits your employer denied you.
Contact an Unemployment Lawyer for a Free Consultation Today
Many unexpected and complex issues can arise regarding unemployment benefits. If you received a denial or need assistance with any type of unemployment-related matter, do not hesitate to consult with the Law Office of Kenneth Carp. Contact us online or call (636) 947-3600 to schedule a free case evaluation.