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You work set hours, follow your supervisor’s instructions, and rely on one company for your paycheck—but you’re labeled as an independent contractor. Something doesn’t add up.
In New York City, this scenario plays out in industries ranging from construction and rideshare services to marketing, hospitality, and tech. While it may not seem like a big deal on paper, being misclassified as an independent contractor can cost you thousands in lost wages, benefits, and protections.
Whether it’s intentional or an honest mistake, misclassification is a serious issue under state and federal law—and employees have the right to take action.
What Is Worker Misclassification?
Worker misclassification happens when a company treats someone who should legally be an employee as an independent contractor. This allows the employer to avoid paying certain taxes, offering benefits, or complying with wage and hour laws.
The difference comes down to control and independence. Under New York law, employees:
- Follow company-set schedules
- Perform core business functions
Use company tools or equipment - Are directed in how to complete their tasks
Independent contractors, on the other hand, typically set their schedules, use their own tools, work for multiple clients, and operate independently.
You might receive a 1099 tax form or sign a contract that calls you a contractor—but that doesn’t mean it’s legally correct. The law focuses on how the relationship works in practice.
Why It Matters: What Employees Lose
Being misclassified isn’t just a technical error—it can have real financial consequences.
When you’re wrongly treated as an independent contractor, you may lose out on:
- Minimum wage and overtime pay
- Employer-provided benefits like health insurance, sick leave, or family leave.
Workers’ compensation if you get hurt on the job - Unemployment insurance if you’re laid off
- Legal protections against discrimination, harassment, and retaliation
Misclassified workers also pay higher self-employment taxes and don’t receive employer contributions toward Social Security or Medicare. Over time, this can significantly reduce your financial security—especially if you rely on a single employer for steady work.
Employers benefit financially from misclassifying workers. But for you, the consequences can include underpayment, lack of legal recourse, and exposure to liabilities you shouldn’t have to bear.
Common Red Flags You’ve Been Misclassified
If you’re unsure about your classification, here are some signs that you may be misclassified:
- You work set hours determined by your employer
- You use the company’s equipment or workspace
- You’re supervised closely and expected to follow specific procedures
- You don’t invoice for your work—you’re paid like an employee
- You work primarily or exclusively for one company
- You’re required to attend meetings or wear a uniform
It’s not whether you signed a contract or received a 1099 but how much control the company has over your work and how dependent you are on them for income.
What to Do If You Suspect Misclassification
If something doesn’t feel right, it’s important to speak up—and protect yourself.
Start by documenting your work relationship:
- Hours worked
- Who directs your work
- How you’re paid
- What equipment you use
- Any communication about classification
- Talk to a NYC wage and hour attorney
At Lipsky Lowe, we help NYC workers recover unpaid wages, overtime, and benefits they were wrongfully denied due to misclassification. We also protect workers from retaliation, which is illegal under state and city law.
Think you’ve been misclassified? Contact us today for a free consultation.