In the so-called gig economy, many New Yorkers no longer fully appreciate the legal distinction between an “employee” and an “independent contractor.” There are significant differences, particularly when it comes to overtime and wage-hour laws. To put it simply, workers classified as independent contractors are not subject to federal or state minimum wage and overtime requirements. Independent contractors are liable for paying their own income and insurance taxes.
Obviously, this creates an incentive for employers to treat workers as independent contractors whenever possible. But there are limits. You cannot simply hire someone to perform a 40-hour per week job under the normal conditions of employment and call that person a contractor. Employers are liable to civil lawsuits for such misclassifications.
How NYC Employers Use “Recruiting” Companies to Skirt Employee Classifications
Although sometimes, good social media shaming will suffice. A recent story involving giant New York City-based publisher Condé Nast offers a case in point. On March 11, 2019, the editor of one of Condé Nast's websites posted a job opening via Twitter, which he described as a “full-time freelance position.” Many folks, notably other journalists and writers, immediately pounced on this description, alleging Condé Nast was illegally trying to misclassify an employee position as one for an independent contractor. In fact, Vox reported that several individuals filed complaints with the New York Department of Labor, which said it would “investigate” the editor's tweets to determine if any laws were broken.
Condé Nast later issued a statement stating the editor's statement “was a mistake,” according to Splinter News, and that “the position had always included benefits.” The Splinter writer, Jack Crosbie, also noted that “full-time freelancers” were common in the media industry. Indeed, Crosbie himself said he worked as a 30-hour per week independent contractor for Splinter, which is owned by GMG Media. As a result, Crosbie said he was “not eligible for health insurance, retirement benefits, union membership, paid time off, or sick days.”
Crosbie also explained how many large companies are able to classify full-time or (or nearly full-time) workers as contractors without technically breaking the law–by using an “intermediary recruiting company.” Basically, the recruiting company “hires” the employee, issues them a W-2 form, and offers a limited selection of benefits. Even if the worker spends all of their time working for the recruiting company's client, they are not considered “employees” of the client.
Contact a New York City Overtime and Wage-Hour Lawyer Today
It is important to understand that just because an employer calls you an “independent contractor,” that does not make it true under the law. There are several legal tests that must be applied to properly classify someone as an “employee” or “independent contractor.” If you have questions or concerns about your own classification status, you should speak with a qualified New York employment attorney right away. Contact the Nisar Law Group, P.C., to schedule a free consultation with a member of our legal team today.