Protections Afforded to Employees But Not Contractors

If you’ve been working as an independent contractor, you could be missing out on some important legal protections. As a contractor, companies are allowed to treat you like any other company or business owner. That means that none of these protections apply to you. This is detrimental to those who are misclassified employees. 

Here are just some of the protections you could be missing out on as a contractor:

Minimum wage

There is both a federal and state minimum wage requirement, although Florida is both much higher and set to steadily increase through 2026 up to $15 per hour. As a contractor, you could be paid a per project or per unit rate that, when compared to number of hours spent on the task, averages out to far below even the federal mandate.

Discrimination laws

Discrimination laws only apply to employees. As a business owner, the company can reject you for any reason they like. As an employee, they cannot pass you over or fire you simply because you are a certain race, gender, or religion. 

Overtime pay

As an independent contractor, you are likely required to complete work by a certain deadline, regardless of how many hours it takes to complete. That means that you could work quite a bit of overtime without seeing any compensation for it. On the other hand, employers are required to pay their employees overtime pay.

Unemployment insurance

Employers are required to pay unemployment insurance for all of their employees. If you are an employee and you are fired or laid off, you have the right to receive unemployment. However, if you are a contractor and the contract is suddenly terminated, you have no recourse, and you have no access to unemployment benefits. 

(There have been some temporary modifications to unemployment off and on during the pandemic, so it is important to get the most updated information about current unemployment policies.)

Liability coverage

As an independent contractor, liability for your work and your performance of it rests solely on your shoulders. An employer is legally required to have workers’ compensation insurance to cover jobsite accidents and liability insurance to cover other types of accidents that cause damage or injury. 

If you are a contractor and do not have the proper coverage, you could be legally liable for all damages and injuries, which could cause most people to go bankrupt. But if you can prove that you were misclassified and should have been considered an employee and therefore covered by the company’s policies, you may be able to save yourself.

As you can see, it is always more beneficial to be an employee rather than a contractor, but hiring and training employees rather than hiring outside contractors costs a lot more money in terms of employment taxes, various types of insurance, and the like. If you believe that you have been mislabeled as a contractor, contact us today for a free consultation.