Your employer may refer to you as an “independent contractor” (or simply, “contractor”). Under this classification, your employer may claim that you are not entitled to the applicable minimum wage, overtime pay, standard withholdings for social security and other payroll taxes, or workers’ compensation or regular unemployment insurance. (During the COVID-19 pandemic, however, independent contractors were temporarily eligible for unemployment benefits under the Pandemic Unemployment Assistance program.)
For these reasons, it can be less expensive for employers to hire independent contractors rather than employees. This gives employers a strong incentive to misclassify people, intentionally or mistakenly, as independent contractors when they are really employees under the law.
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The content of this article pertains to all US states and counties.