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Joseph
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Category: California Employment Law
Satisfied Customers: 5299
Experience:  Extensive experience representing employees and management
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I have been paid thorugh my employer thorugh W-2 for 22 years.

Resolved Question:

I have been paid thorugh my employer thorugh W-2 for 22 years. I am a sleep disorders specialist and licensed psychologist in Calif. and employed by a medical group. I put together, from scratch, a sleep disorders center 22 years ago and was the director for many years until a back injury forced me to abdicate that title and go part-time and work almost completely from home interpreting sleep studies and dictating sleep study reports for the last 7 years. I lost all benefits too but was still paid via W-2. Then last week I was called in and told they are switching my status to "indpendent consultant" (which I assume means 1099) and gave the reason that the reimbursements they are receiving from medical insurers like Medicare for what I do have dropped. The drop in salary I expect is 37.5%, and with the added 7.5% FICA/Medicare I understand I will have to pay myself, this amounts to a 45% salary decrease for the same work. Do I have any recourse other than to quit?
Submitted: 5 years ago.
Category: California Employment Law
Expert:  Joseph replied 5 years ago.
Hello and welcome to JustAnswer.

Unfortunately, as an at-will employee, your employer is free to change the conditions of your employment without any prior notice.

However, in order for you to be paid via a 1099 you need to be correctly classified as an independent contractor and not an employee.

The primary test for determining whether a person is an employee or an independent contractor is whether the person has control over his or her work.

As stated in the Department of Industrial Relations website:

"The most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed."

Additional factors include:

  • 1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
  • 2. Whether or not the work is a part of the regular business of the principal or alleged employer;
  • 3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
  • 4. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
  • 5. Whether the service rendered requires a special skill;
  • 6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
  • 7. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
  • 8. The length of time for which the services are to be performed;
  • 9. The degree of permanence of the working relationship;
  • 10. The method of payment, whether by time or by the job; and
  • 11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.

In order for you to be paid as an independent contractor you need to be correctly classified as one.

 

For additional discussion see this website:


https://www.dir.ca.gov/dlse/FAQ_IndependentContractor.htm

 

If you believe you are being misclassified as an independent contractor you can file a wage claim against your employer with the Department of Industrial Relations for the amount that you should be paid as an employee.

 

You can file the claim using the forms available online here:


https://www.dir.ca.gov/dlse/HowToFileWageClaim.htm

Customer: replied 5 years ago.

It seems that the most relevant factor for me would be:


"The most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed."

 

Can you explain what this means? I do not see that I will have any more control over my work than I had as a W-2. I will be doing the same exact work, including covering for my co-worker physician when he is on vacation, but with reduced pay as I will be paid piecemeal for each sleep study I interpret and guaranteed no salary.

Expert:  Joseph replied 5 years ago.
Yes, the main consideration is whether you or the employer has the control over your schedule and where you work.

If you are being scheduled by the employer, including covering for your co-worker,and you are working at the employee's facilities then you should be classified as an employee and not an independent contractor.
Customer: replied 5 years ago.

In your answer below did you mean to say "working at the employer's facility..." (you wrote employee's facility). Because of my disability I work almost entirely at home and have for 7 years.

 

If you are being scheduled by the employer, including covering for your co-worker,and you are working at the employee's facilities then you should be classified as an employee and not an independent contractor.

Expert:  Joseph replied 5 years ago.
Sorry, yes, I meant 'working at the employer's facility.'

However, if you're still scheduled to work by your employer then you should be classified as an employee, since the other factors weigh in the favor of you being classified as an employee and not an independent contractor.
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