When is a Contractor a Full-Time Employee?
How to classify workers in New York
on September 27, 2019
Updated on May 22, 2022
Earlier this year, an editor at Epicurious, a Condé Nast food publication, triggered a firestorm when he tweeted a job post for a “fulltime freelance” editorial assistant who would work 40 hours a week, usually considered full-time employment. Two days later, amid growing outrage on Twitter, the editor clarified that the new hire would, after all, receive fulltime benefits.
Consider it a sign of the times. The IRS estimates that U.S. business owners have misclassified millions of contract workers, sometimes in error, but often to avoid paying for overtime, critical benefits and employment tax obligations, not to mention insurance coverage and protection against on-the-job harassment and discrimination.
Lawrence Pearson, a labor and employment attorney at Wigdor LLP, remembers a client who freelanced on a reality TV program as an editor and production assistant. “The arrangement was that people would put in many hours per week on the production of the show, but their work was very closely controlled by the company and by the top people on the show. These were people who were either on set or at the company’s offices for 50, 70, 80 and more hours per week. And yet they were being paid as contract employees.”
How do you, as an independent contractor, know if you should be considered a full-time employee?
Lawyers say to be suspicious if the client insists on dictating the number of hours you put in, won’t allow you to subcontract with assistants to get the job done, or closely monitors your work. “If they have a non-compete obligation, that’s a real red flag,” says Hope Pordy, a plaintiff-side employment attorney and partner at Spivak Lipton.
Over the years, Pordy has represented clients who have worked as independent contractors for a single particular employer for up to 20 years. “Clearly, that’s an abuse,” she says. “They’re working for a single entity for many years, doing the same job right alongside someone who’s being treated as an employee. They’re not going out and engaging in business for themselves, and they’re deprived of all the benefits and privileges of employment. We are creating a very vulnerable workforce.”
Just because you work at home, have some flexibility in your schedule, or telecommute doesn’t mean you’re an independent contractor. True self-employed entrepreneurs provide products or services, often under contract, for multiple clients or customers. They set their own hours, use their own tools and supplies, and meet mutually-agreed-upon deadlines.
It all boils down to who’s in charge of your work methods, Pordy adds. “It’s really a question about who is controlling how that work is getting done.”
If you feel you’ve been improperly classified as an independent contractor, says Pordy, make a list of issues that have arisen while you’re still on the job. Try to get copies of employee handbooks and benefit plans. (As a “permatemp,” you may be barred from access to these documents.) Band together with other freelancers to ask for the benefits you deserve. Contact the U.S. Department of Labor, which has a vested interest in cracking down on workarounds that cheat the government of tax dollars for programs like workers’ comp and Medicare and Social Security.
Pursue your rights in a timely manner, Pordy adds. You may be entitled to back overtime pay, but only if you file a claim within three years. Different statutes of limitation apply to employee benefits, and state and federal limitations differ.
Most importantly, says Pearson: Trust your instincts. “If you believe that the kind of job you’re doing is typically one that would come with the legal protections and rights that are given to employees,” he says, “or if you think that you’re being shoehorned into the independent contractor category, you should absolutely do some research online and, of course, speak with somebody who has experience in the area—whether an attorney or somebody who works for a department of labor-type agency.”