Sometimes, an employer may misclassify all workers as a way to save money. When you work as an independent contractor, your employer does not have to provide you with benefits nor pay employment taxes on your earnings.
It can be a huge draw to employers to try to work the system by misclassifying you, but it is detrimental to you and your co-workers. You could band together for a class-action lawsuit against your employer to fight for reclassification and compensation for the benefits you lost as a result.
To see if you have a case, you need to understand a little more about the distinction between employee and independent contractor. According to the State of California Department of Industrial Relations, the state has very strict definitions for independent contractors, which requires a test to determine if the classification is correct. You should note that California has a limited definition, even compared to the federal definition.
The ABC test gives you certain criteria that you must meet for your employer to classify you as an independent contractor. You can often use the ABC test to determine if you have a good case.
Under this test, you must meet all three criteria to be an independent contractor. The first is that the work you do is an independent trade or business. The second criterion is that the work you do for the employer is not part of the employer's regular business, and the last is that you have complete control over your work direction and performance.
For example, if your employer sells windchimes and your job is to make the wind chimes, then you cannot be an independent contractor because the work you do is part of the employer's regular business. On other hand, if your job is to fix the wind chime equipment and you own your own windchime equipment repair company, then you likely are an independent contractor.