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12 Mar What’s an independent contractor?

Posted at 10:30h in Employment Categories, Independent Contractor

What's an independent contractor? Put simply, someone that does work for an employer, but is not an employee. Unlike employees, who have an employment contract with their employers, independent contractors are not technically part of the company or organization for which they're doing work. Instead, they simply have a contract in which they agree to do certain work for that company or organization. Presumption against independent contractor status California law presumes that if you’re working for somebody, you are an employee. Accordingly, the employer bears the burden to prove that you are not an employee. Even if your contract says you're an independent contractor, that doesn't mean you're properly classified as an independent contractor. Courts consider a number of factors in determining whether someone is an independent contractor or an employee. If most of the factors show someone is an employee, they are legally an employee, regardless of what the contract says. What's an independent contractor? The main factor is level of control Courts look at many factors, but level of control is the main factor. In other words, what's the extent of the employer’s right to control the manner and means of the employee’s performance? If the employer exercises control over the person in terms of the manner and means of performing their job, then they are more likely an employee as opposed to an independent contractor. For example, if you hire an electrician to rewire your house, you're probably not micromanaging their work. You tell them what you want done, but you don't tell them what tools to use or how to manage their time. This type of relationship is typically not employer-employee. Conversely, if a company hires someone and tells them when and where to be during work hours, what they should be doing, and how to do it, he's probably an employee. Nature and length of the relationship Some of the other factors to consider are whether the hiring entity can terminate the employment relationship at will. If they can, this suggests it's an employer-employee relationship. Also, whether the worker is engaging in an occupation or business that is distinct from the employer’s business or occupation. For example, say a law firm hires somebody to do IT work for it here and there. That is a distinct business from the employer (meaning the law firm’s business). This would probably favor characterizing the IT person as an independent contractor. Conversely, suppose you're a salesperson at a shoe store. Their business is selling shoes and your job is selling shoes. That your job is a core part of their business makes it more likely that you're an employee. Courts also consider the length of time over which someone performs the work. If you hire someone for a few hours of work, they're probably not an employee. But if you hire someone to do that same thing every day for a year, that's different. The worker's authority also comes up. If you can hire and fire others, then you're probably an employee. Another issue to consider is how the employer pays. Do they pay an hourly rate? A regularly salary? Or per job? For example, take that IT professional. If she's paid for each computer that she sets up, this might favor being characterized as an independent contractor. Conversely, if the law firm paid her a certain amount every month to run their IT, that would make it more likely that she is an employee. Type of work and skill involved There's also the worker's skill. If you’re an IT professional and you’re coming in and setting up a computer for a business you're likely an independent contractor. That's because you're likely doing it without any supervision or direction by the company that has hired you. Another factor is the skill that’s required to perform the work. Also, whether the business provides the instrumentalities, tools, and place of work. For instance, if you do landscaping or cleaning services, and you bring your own cleaning or landscaping tools, and you do it at the hirer’s residence or place of business, then you might be considered an independent contractor. If a contract says you're independent contract, it doesn't necessarily mean you are. But courts will consider that. If the parties believe they are creating an employment relationship, or if they believe they are creating an independent contractor relationship, then that fact is also used in determining whether you should be an independent contractor or an employee. If you believe that your employer has wrongfully classified you as an independent contractor, contact the Khadder Law Firm today for a free initial consultation. For more, follow us on Twitter and Instagram....

06 Mar What’s an Exempt Employee?

Posted at 10:28h in California Labor Code, California Law, Employment Categories

What's an exempt employee? It simply means that an employee is exempt from certain wage and hour laws. We've written a few posts about the difference between employees and independent contractors. But there are also two kinds of employees: exempt and non-exempt. What does it mean for an employee to be exempt? Both federal and California law have lots of laws governing employment. For example, laws that set a minimum wage or require overtime pay. But some of these laws don't apply to all employees. For instance, the law doesn't require overtime pay for some salaried employees. These employees are exempt from the overtime law. How do I know if I'm exempt? California law presumes that an employee is non-exempt. Accordingly, the employer bears the burden to show that an employee is exempt. To do so, the employer must show that the employee fits plainly and unmistakably within the exemptions’ terms. It is a mixed question of law and fact, but again, the burden is on the employer. Additionally, California law is more protective than federal law on this issue. California wage and hour laws address several categories of exempt employees. Employees must satisfy certain criteria to fall within each exemption. All of them use what is called the “primarily engaged in” test. Under this test, your employer may consider you an exempt employee if you're primarily engaged in work that qualifies for exemption. You're primarily engaged in exempt work if more than 50% of the work that you do falls within the exemption. So if more than 50% of your work is of the type that qualifies for a specific exemption, your employer can consider you exempt. Types of exemptions One of the more common exemptions is the executive, administrative and professional employees' exemption. To be exempt under this category, you have to be primarily engaged in duties that meet the test of the exemption, which are established by a wage order. Under this rule, you have to customarily and regularly exercise discretion and independent judgment in performing those duties. Also, you have to earn a monthly salary that is equivalent to at least twice the state minimum wage for full time employment. The idea is this: If you are an employee working at a restaurant, or working in a job that pays you by the hour, and you don’t make more than twice the minimum wage, then you don’t really manage people, and you don’t exercise independent judgments - you basically have a supervisor or manager that tells you what to do - California wage and hour laws should protect you. You should be able to get minimum wage pay and overtime pay, and other protections under the California labor code. There are other exemptions as well. If you believe that your employer has wrongfully classified you as an exempt employee, contact the Khadder Law Firm today for a free initial consultation. For more, follow us on Twitter and Instagram....

02 Mar Different Employment Classifications

Posted at 10:24h in California Labor Code, Employment Categories, Exempt, Non-Exempt

There are three different employment classifications. Two of them fall within the employee classification. The other one falls into the independent contractor classification. Different employment classifications: Two types of employees The first are a exempt employees. An exempt employee is an employee that the labor code exempts from minimum wage and overtime requirements. The labor code sets out certain requirements to be exempt. Employees that meet those requirements are exempt. The second are non-exempt employees. Under the labor code, minimum wage and overtime pay requirements apply to non-exempt employees. This is the default classification for employees. Therefore, courts presume an employee is non-exempt unless the employer can affirmatively show they fit into one of the exempt categories. Non-employee classification: Independent contractors Lastly, there are independent contractors. Independent contractors are not employees. Any person an employer pays for work who is not an employee, is an independent contractor. Much of state and federal labor and employment law does not apply to independent contractors. For example, there is no minimum wage for independent contractors. Furthermore, employers need not provide benefits to independent contractors. But California law presumes employee status, so employers must prove someone is eligible to be an independent contractor if it comes before a court. These are the different employment classifications. If you have a job, you fall into one of these three categories. Unfortunately, employers regularly misclassify workers to save money. For example, your employer may classify you as exempt to avoid paying you overtime. But the law is independent of your employment agreement. As such, the law may still consider you non-exempt, even if your employer treats you as exempt. Instead, it simply means that your employer has misclassified you. Fortunately, the law provides remedies to victims of misclassification. Therefore, you should not assume that you are stuck with your classification even if you believe it is wrong. If you have question about how your employer has classified you, contact the Khadder Law Firm today for a free initial consultation. For more, follow us on Twitter and Instagram. And like us on Facebook....

28 Feb Mandatory Arbitration Clauses

Posted at 10:07h in Arbitration Agreement, California Law, Mandatory Arbitration, PAGA - Private Attorney's General Act

Mandatory arbitration clauses are contractual provisions that require you to submit any claims to arbitration instead of going to court. There are some exceptions to what can be forced into arbitration. One exception for now is representative actions under the Private Attorney’s General Act or PAGA. PAGA is a California law that basically deputizes individuals to seek penalties against employers that violate the California labor code. There are a few other minor exceptions, all within the State context. It is a little more complicated in the Federal context due to certain executive actions by the President. But, in the context of the state of California, it depends on what the arbitration agreement says. Most arbitration agreements are so broad that they include almost any kind of claim that can be forced into arbitration, and it doesn’t matter how egregious the conduct of the employer is; if there is an agreement between the employer and employee to arbitrate that type of claim, and there almost always is, then it can still be forced into arbitration. In that scenario, there is no way to get out of the arbitration agreement unless there is actually something unconscionable with the arbitration agreement itself. In terms of the types of claims or how egregious the claims are, it doesn’t really have an impact upon whether or not an employee will be forced to enter arbitration. If you have questions about a mandatory arbitration clause, contact the Khadder Law Firm today. For more, follow us on Twitter and Instagram. And like us on Facebook....

24 Feb Mandatory Arbitration Clauses and Employment Disputes

Posted at 10:03h in Litigation - Suing Your Employer, Mandatory Arbitration

Mandatory arbitration clauses, especially since 2011, have become more and more common in the employment context. I’ve talked about this in some of my other blog posts about how much I disdain mandatory arbitration clauses and unfortunately, there are many problems with mandatory arbitration, especially in the employment context. The biggest issue among many is that employers with arbitration clauses will probably have to participate in multiple arbitrations, and the arbitrators are essentially private judges. There is the potential for the arbitrators to rule in favor of the employer in order to get repeat business (called “the repeat player effect”). Individual employees typically don’t have to go to arbitration more than once in their lifetime, if ever, so there is no potential incentive for an arbitrator to rule in an employee’s favor. Another problem with mandatory arbitration, is that it could, but not necessarily will, have an effect on the value of the case. If an employee is presented with an arbitration agreement, they should think long and hard, and even think about talking to a lawyer before signing it. Not all employers, however, will give you the option of signing it or not signing it. Some do, but a lot of them don’t. Everyone should keep in mind that if they sign an arbitration agreement, they are most likely going to be forced to go to arbitration as opposed to having their day in court in front of a jury. That can affect the value of their case. If you don’t have a choice in the matter, you can either agree to the arbitration agreements, or you will have to find another job. That is not an easy decision for most people to make, but, unfortunately, it is becoming more and more commonplace. One mitigating factor about arbitration in the employment context is that if the employer requires the employee to go to arbitration, the employer has to pay for the arbitrator fees. The employee only has to pay for what they would normally pay if they were in a regular court of law. Frankly, the arbitrator fees can cost far more than any cost associated with filing a case in a court of law. So, sometimes employers will decide that they don’t want to enforce the arbitration agreement because it would cost a lot of money. That’s one advantage that an employee who is forced to sign an arbitration agreement may have in their back pocket. Arbitration agreements have to follow certain procedural and substantive requirements. If the agreements are procedurally or substantively unconscionable to a certain extent, then a court may decide that the arbitration agreement is not enforceable. If an employee has a legal claim against their employer, and there is an arbitration agreement, it would be very important to speak with an employment attorney to evaluate whether the arbitration agreement could be found unenforceable in court so that the employee can have the chance to bring their claims to a jury of their peers as opposed to a private judge. If you are presented with an arbitration agreement by your employer, or if you have already signed an arbitration agreement and have a legal claim against your employer, contact an employment lawyer today at the Khadder Law Firm for a free initial consultation....