You go to work, follow instructions, and use the company’s tools; just like any other employee. But when payday comes, there’s no paycheck with taxes taken out. Instead, you get a 1099 at the end of the year and are told you’re an “independent contractor.” If that doesn’t feel right, it might be because it isn’t.

This article will explain what employee misclassification is, why it’s such a common issue in California, and how it can cost you important rights like overtime pay, benefits, and legal protections. We’ll also share how Employee Law Group in Torrance helps workers prove they’ve been misclassified and recover the wages, benefits, and protections they’re entitled to.

Understanding Employee Misclassification

Before we dive into the legal details, it’s important to understand what employee misclassification really means and how it differs from legitimate independent contractor status.

What Is Employee Misclassification?

Employee misclassification occurs when an employer treats a worker as an independent contractor instead of an employee, even though the worker meets the legal definition of an employee under California law or the Fair Labor Standards Act (FLSA).

An employee typically:

• Works under the direction over the performance of the employer.
• Receives a W-2 with tax withholding.
• Is eligible for benefits and protections under state and federal labor laws.
  

An independent contractor, on the other hand:

• Operates an independently established trade or business.
• Is free from the company’s control in how the work is done.
• Provides services to multiple clients.

Common Reasons Employers Misclassify Workers

Some employers misclassify their employees to:

• Avoid paying overtime and minimum wage.
• Reduce employment tax obligations.
• Skip paying unemployment insurance and workers’ compensation insurance premiums.

Sometimes misclassification occurs because the employer misunderstands the law. But in many cases, it’s a deliberate choice to cut costs; one that can result in penalties for failure to properly classify their workers.

Why Classification Matters for Your Rights

Understanding the difference between employee and independent contractor status is key because it directly affects the pay, benefits, and protections you’re entitled to under the law.

Benefits and Protections Employees Receive

When you are classified as an employee, you are entitled to:

• Overtime pay under the FLSA and California wage laws.
• Meal and rest breaks.
• Unemployment insurance and family and medical leave.
• Employer-paid workers’ compensation insurance.
• Tax withholding for Social Security and Medicare, which helps you qualify for benefits later in life.

What Independent Contractors Do Not Receive

If you’re classified as independent contractors, you lose access to:

• Overtime pay and guaranteed minimum wage.
• Employer-paid health insurance, retirement plans, and paid time off.
• Legal protections against certain types of wrongful termination or workplace discrimination.

This difference is why misclassification deprives workers of not only wages, but also legal protections and long-term benefits.

California’s ABC Test for Worker Classification

To help decide who qualifies as an employee versus an independent contractor, California relies on a clear three-part rule known as the ABC Test.

Overview of the ABC Test

California uses the ABC Test to determine worker classification under Assembly Bill 5 (AB 5). An employer must prove all three conditions to classify a worker as an independent contractor:

If you fail any part of this test, you are classified as an employee under California law.

Exemptions to the ABC Test

Certain professions, such as licensed attorneys, doctors, real estate agents, and specific business-to-business relationships, may be exempt. In these cases, the older Borello test or other legal standards apply. However, exemptions do not mean employers can misclassify workers without consequences.

Signs You May Be Misclassified

You may be improperly classified as independent contractors if:

• You receive a 1099 but perform the same duties as W-2 employees.
• Your employer sets your schedule and controls your work.
• You work full-time for one company with little independence.
• The company provides the tools, equipment, and workspace.
  

If this describes your situation, your employer could be violating both state and federal labor laws.



How Misclassification Leads to Lost Wages

Misclassification doesn’t just affect your job title. It can have a real impact on your paycheck and the benefits you’re entitled to receive.



Unpaid Overtime

Workers classified as independent contractors are not entitled to overtime pay. If you work over 8 hours in a day or 40 in a week and do not receive overtime, you may have a claim for back pay.

Unreimbursed Business Expenses

When misclassification occurs, you may pay out-of-pocket for tools, travel, mileage, or supplies; expenses your employer should cover if you were properly classified.

Denied Benefits

Being misclassified means losing benefits such as paid sick leave, vacation pay, retirement contributions, and employer-paid insurance. Over time, this can add up to a significant loss in compensation.

Steps to Take If You Suspect Misclassification

If you think you’ve been misclassified, there are important steps you can take to protect your rights and build a strong case.



Gather Documentation

Start by collecting any paperwork that shows your work situation, including:

• Pay stubs and tax forms
• Your employment contract, offer letters, or agreements
• Work schedules and messages that show how your employer controls your work

Compare Your Work Situation to Legal Criteria

Use the ABC Test to see if you legally qualify as an employee. You can also review IRS guidelines and the Fair Labor Standards Act (FLSA) definitions for worker classification.

Report and Seek Legal Advice

If you believe you’ve been misclassified, you can file a complaint with the California Department of Labor Standards Enforcement or the U.S. Department of Labor. Getting help from an attorney can make sure your claim is filed correctly and has the best chance of success.

Filing a Claim for Lost Wages in Torrance

If you believe you’re owed unpaid wages or benefits, it’s important to know where and how to file your claim to protect your rights.

Where to File a Complaint

 You can file your claim at either the state or federal level, depending on the issue:

• California Labor Commissioner’s Office: For unpaid wages and benefits under state law
• U.S. Department of Labor: For violations of the Fair Labor Standards Act (FLSA)

Important Deadlines

Deadlines can vary, but generally, you can claim back pay for up to three years from the date you were wrongfully denied wages.

Tips for Filing Your Claim

• Gather all relevant documents like pay stubs, tax forms, contracts, and work schedules.
• Keep records of any communication with your employer about your work status or pay.
• Be prepared to explain how your work fits the legal definition of an employee.
• Consider consulting with an attorney to help guide you through the process and strengthen your claim.

Working with an Employment Law Attorney

At Employee Law Group, we investigate your worker status, calculate unpaid wages, and help prove you were misclassified. We handle both negotiations and court actions when employers refuse to pay.

Legal Remedies and Compensation

If you’ve been misclassified, there are several types of compensation and remedies available to help make things right.

Types of Compensation You May Be Eligible For:

If your claim is successful, you may be entitled to several types of financial compensation to cover your losses and expenses.

• Back pay for unpaid overtime and minimum wage
• Reimbursement for business expenses you paid out of pocket
• Statutory penalties imposed on employers for breaking the law
• Attorney’s fees and court costs related to your case
   
  

Non-Monetary Remedies That Can Also Help:

Besides money, there are important non-monetary remedies that can help restore your rights and protections as a worker.

• Correction of your official worker classification status
• Restoration of benefits and contributions you lost due to misclassification

How Employee Law Group Helps Misclassified Workers

When you’re facing misclassification, having an experienced legal team on your side can make all the difference in getting the results you deserve.

Our Approach to Misclassification Cases

We gather records, conduct investigations, and present evidence to prove you were a worker as an employee, not a contractor. We know how to hold employers who fail to comply with the law accountable.



Local Advantage

Because we know Torrance industries and courts, we can build targeted strategies for worker misclassification cases.

FAQs About Employee Misclassification

Conclusion

Misclassification of workers in Torrance is more than a paperwork issue; it’s a violation of applicable laws that can cost you wages, benefits, and protections. If you’ve been classified as independent contractors but perform the work of an employee, you may be entitled to significant back pay and benefits.

At Employee Law Group, we know how to prove misclassification, challenge questionable employment tax practices, and get results for our clients.

Contact us today for a free consultation and find out how we can help you claim lost wages and protect your rights.