Am I Misclassified? How to Recognize Your Employment Status in San Antonio, Texas

Are you one of the countless workers in San Antonio, Texas, grappling with the confusion surrounding your employment status? “Am I misclassified?” is a question that many workers ask themselves. Are you unsure if you’re an employee or an independent contractor, and what that means for your rights and benefits? The answers may lie in understanding the concept of misclassification and the telltale signs that you might be misclassified. At Galo Law Firm, we understand misclassification issues and know the steps you can take to rectify your employment status.

A man and woman working on a laptop outside.

It’s important to know the definitions and differences between employees and independent contractors, the impact of misclassification on workers and employers, how to recognize misclassification signs in San Antonio, Texas, and practical steps for addressing misclassification. Employers can prevent misclassification by working with Galo Law Firm and we can help both employees and employers navigate the complexities of misclassification laws in San Antonio, Texas. Call us at 210-764-6135 for a consultation, and let our experienced legal team help you maintain compliance and foster a fair and legally sound work environment.

Understanding Misclassification: Employee vs. Independent Contractor

Misclassification occurs when workers are incorrectly labeled as independent contractors instead of employees, affecting their rights and benefits. The consequences of misclassification can be dire, as employees are entitled to certain rights and benefits that independent contractors are not, such as minimum wage, overtime pay, and workers’ compensation insurance. Moreover, businesses are required to pay payroll taxes, state and federal unemployment insurance taxes, and disability insurance for employees, yet these do not apply to independent contractors. Sadly, some businesses misclassify workers to circumvent employment-related duties, reducing labor and administration costs and potentially violating labor laws.

Fully comprehending the implications of misclassification necessitates an understanding of the distinctions between employees and independent contractors and their respective rights and benefits.

Employee Definition

Employees are individuals who work under the control and direction of an employer, receiving benefits and protections under labor laws. In Texas, the legal definition of an employee refers to a person who is in the service of another under a contract of hire, whether expressed or implied, orally or in writing. Employees in Texas enjoy several rights and protections under Texas labor laws, including employee status, which grants:

  • Protection against discrimination
  • The right to fair wages
  • Protection against harassment
  • The right to a safe workplace
  • The right to benefits such as unemployment insurance and workers’ compensation.

Misclassification may necessitate the recovery of unpaid wages. Although Texas generally provides benefits like unemployment benefits, health care, retirement plans, paid time off, and meal or rest breaks.These are not mandated under Texas or federal law. For guidance on employee classification and related tax implications, employers could consult the Internal Revenue Service (IRS).

Independent Contractor Definition

On the other hand, independent contractors are self-employed individuals who provide services to clients without the same benefits and protections as those afforded to employees. Independent contractors maintain their independent contractor status and are not subject to the control and guidance of the hiring entity. Misclassification can lead to unpaid wages and other labor law violations in Texas and beyond.

Employers often misclassify workers to circumvent labor laws, resulting in a need for employees to recover unpaid wages and other benefits. Unreported wages, or employment that remains fully invisible to tax authorities, can only be discovered through a tax audit, workplace investigation, or worker complaint.

The Impact of Misclassification on Workers

Misclassified workers may lose out on benefits, protections, and legal rights. For example, they may not be granted access to employee benefits, eligibility for overtime pay, protection under wage and hour laws, workers’ compensation coverage, rights under civil rights laws, protection under the Family and Medical Leave Act (FMLA), entitlement to minimum wage, expense reimbursement, and compensation for damages proven due to misclassification. Employers found guilty of misclassification may face penalties and legal repercussions, including responsibility for unpaid back wages, liquidated damages, unpaid unemployment taxes, unpaid federal taxes, and attorney fees.

Employers misclassify employees as independent contractors for their own gain. They do this to get out of paying payroll taxes and health insurance benefits. This not only harms the misclassified workers but also affects the overall economy and fairness in the labor market.

Recognizing Misclassification Signs in San Antonio, Texas

Recognizing the signs of misclassification is the first step toward addressing the issue. Some common indications of employee misclassification in the workplace include:

  • Your employer determines your work hours, location, and how you carry out your job
  • Your employment terms are ongoing
  • Your employer providing equipment or supplies
  • You are exclusively working for your employer
  • You being employed by your employer indefinitely

These indications may suggest that you are misclassified as an independent contractor instead of being appropriately classified as an employee.

In San Antonio, Texas, particular indicators of misclassification include:

  • The employee not being subject to the control or direction of the employer or company when executing work
  • The tasks the employee performs not being essential to the employer’s business
  • The employee being remunerated on a project basis rather than receiving a regular wage

Being aware of these signs can help you take the necessary steps to address misclassification and protect your rights.

How to Address Misclassification in San Antonio, Texas

If you suspect that you have been misclassified, it’s important to take action to rectify the situation. Addressing misclassification involves gathering evidence, seeking legal advice from Galo Law Firm, and contacting relevant authorities to ensure your rights and benefits are protected.

Gathering Evidence

Collecting information about your employment situation, like contracts, pay stubs, and communication with your employer, helps determine the true nature of the employment relationship. Such evidence could include contracts, pay stubs, work schedules, and testimonies from coworkers and supervisors, which are vital in evaluating if an individual is correctly classified as an employee or an independent contractor, impacting their rights and benefits under labor laws.

To adequately store and organize evidence related to possible misclassification, an employee should:

  • Keep meticulous and methodical records of their work hours, tasks performed, and any communication or agreements with the employer
  • Secure copies of pertinent documents
  • Store these records in a safeguarded and readily accessible location
  • Periodically update and maintain the records
  • Be prepared to present these records as evidence in the event of an audit or legal dispute.

Seeking Legal Advice

A consultation with an experienced employment attorney can help determine if you have been misclassified and discuss potential legal actions. An employment attorney can offer legal representation and guidance in cases of worker misclassification in San Antonio, Texas. They can:

  • Evaluate the situation
  • Ascertain if misclassification has taken place
  • Help workers pursue their rights and remedies
  • Aid in filing complaints
  • Negotiate settlements
  • Represent workers in legal proceedings

Employment attorneys possess experience in employment laws and regulations, enabling them to manage intricate legal matters associated with worker misclassification.

To select an experienced employment attorney for worker misclassification issues in San Antonio, Texas, follow these steps:

  1. Research reputable law firms or attorneys focusing on employment law.
  2. Seek out attorneys with experience specifically in worker misclassification cases.
  3. Peruse client reviews and testimonials to gauge the attorney’s reputation.
  4. Arrange consultations with potential attorneys to discuss your case.
  5. Weigh the attorney’s fees and payment structure to ensure it aligns with your budget.
  6. Select an attorney who displays a thorough understanding of employment laws and has a successful track record in handling worker misclassification cases.

Contacting Authorities

To rectify the situation, reporting misclassification to the appropriate authorities is a necessary step. In San Antonio, Texas, employees should contact the Labor Commissioner’s Office, the Texas Workforce Commission (TWC), or the San Antonio office of the Department of Labor to report misclassification. These agencies can investigate your situation and take appropriate action to ensure your rights are protected.

To submit a complaint of misclassification to the U.S. Department of Labor, you must provide your name, address, and phone number, as well as information about the employer and the nature of the misclassification. Remember that employees who bring misclassification to the attention of relevant authorities are safeguarded by a variety of measures, including determination by the Wage and Hour Division, penalties for misclassification, access to benefits and protections, and enforcement of labor and employment laws.

Preventing Misclassification for Employers

A group of attorneys working together.

Employers can prevent misclassification by correctly classifying workers, conducting regular reviews, and staying updated on labor laws and regulations, including the Fair Labor Standards Act.

Proper Classification

Correctly classifying workers as employees or independent contractors based on their job duties and relationship with the company is vital for labor law compliance and avoiding potential penalties. Employers should take into account factors such as:

  • Control
  • Integration
  • Financial control
  • Benefits
  • Compliance risk

when determining the correct classification for a worker. Moreover, they should refer to the common law test utilized by the IRS, which comprises a twenty-point test. Employers should also be cognizant of federal and state definitions and guidelines for proper classification.

Proper classification not only protects employers from potential legal consequences but also ensures fairness and equity for workers in the labor market. By adhering to the guidelines for classifying workers as employees or independent contractors, employers can contribute to a fair and just work environment for all.

Periodic Reviews

Regular reviews of worker classifications are vital for employers to ensure labor law compliance and avoid potential penalties. It is recommended that employers conduct periodic reviews of employee classifications at least once a year. The steps typically involved in conducting a periodic review of worker classifications include:

  1. Documenting the job evaluation process
  2. Reviewing the system periodically
  3. Conducting job analysis
  4. Evaluating job responsibilities
  5. Updating worker classifications

Regular classification reviews offer numerous advantages, including:

  • Cost reduction
  • Improved workforce management
  • Heightened employee satisfaction
  • Risk abatement

By committing to regular reviews and updates, employers can create a more equitable and efficient work environment.

Contact The Galo Law Firm 

Galo Law Firm offers assistance to both employees and employers with misclassification issues, providing legal advice, representation, and guidance throughout the process. With over twenty-five years of experience, attorney Michael Galo has represented clients in disputes related to sexual harassment, discrimination, employment contracts, wages, and wrongful termination.

Whether you are an employee seeking to address misclassification or an employer striving to prevent misclassification, Galo Law Firm is committed to offering the highest standard of legal representation, professionalism, integrity, and steadfast commitment to your case. Do not hesitate to contact Galo Law Firm at 210-764-6135 to discuss your misclassification concerns and explore your legal options.

Frequently Asked Questions

What is misclassification of employees in Texas?

Misclassification of employees in Texas is a form of payroll fraud whereby employers illegally misclassify workers as independent contractors to avoid paying relevant taxes. This practice not only hurts workers and their families but local businesses who are trying to comply with the law.

What are two things that can happen if there is a misclassification of a worker?

Misclassification of a worker can lead to employers violating wage, tax, and employment eligibility laws. Organizations can also be held liable for failing to pay overtime and minimum wage under the FLSA and state wage laws.

How do you correct employee misclassification?

To correct employee misclassification, an employer should submit Form 8952 to the IRS and ensure they make all affected parties whole again by paying back taxes, benefits contributions, pension contributions, and fines that may be associated with the issue. They may also need to audit their company to discover additional errors.

Can I sue for employee misclassification in Texas?

Yes, you can sue for employee misclassification in Texas. You can file a civil lawsuit under federal law or a complaint with the Department of Labor or the Texas Workforce Commission.

What are the key differences between employees and independent contractors?

Employees are under the direct control of their employer, while independent contractors are self-employed and generally receive fewer benefits and protections.

Covid 19 Notice:

Office open during these times and available via video conference or Skype if necessary.