Workers in a variety of different circumstances may take legal action against their employers. Wage and hour claims are among the top causes of employment litigation. When workers believe that companies have violated their pay rights, they can take the matter to court and potentially secure the wages they deserve.
Many different business practices might lead to wage and hour claims. Questionable employment practices, inappropriate payroll rules and off-the-clock labor could all inspire wage and hour lawsuits brought by employees. If workers who took jobs as independent contractors eventually realize that they are actually employees, those workers might also have grounds for wage and hour claims. Their employer may have intentionally misclassified them in a bid to reduce how much it costs to hire someone.
How misclassification affects pay
Companies that misclassify workers can appear technically complaint with employment laws while actually denying workers some of their most basic rights. The laws entitling workers to minimum wage and overtime pay only apply to employees. Independent contractors are technically self-employed professionals, which means that the companies that contract with them don’t have to proactively comply with minimum wage and overtime rules.
A contractor might take a position with the company, only to realize they need to put in far more hours than initially anticipated due to the scope of the work or the demands of their supervisor. When they compare the number of hours worked with the compensation they receive, they may discover that their hourly wage actually drops below the current minimum wage. Other times, they may have worked more than 40 hours and not received overtime pay for that extra effort.
Workers who can show that a company treats them like employees despite claiming they are independent contractors could fight back against their misclassification and secure reimbursement for subpar wages or unpaid overtime. They may even obtain compensation for taxes they had to pay on their own behalf because their employer misclassified them in some cases.
There is a lot of nuance to misclassification claims and wage lawsuits in general. Understanding the federal and state employment laws that apply to wages and independent contractors may help those who think that their employers have intentionally or unintentionally misclassified them.