I just received a 1099 tax form in Los Angeles from my employer and found out I owe a lot in taxes. I thought I was an employee. What are my legal rights?

When you got your job, you probably did not care how your employment status was classified. However, as you are discovering now, whether or not you are classified as an “independent contractor” or an employee can make a huge difference over the course of the work.

Legally, most workers are either independent contractors or employees. Independent contractors are workers who are not classified as employees. In some cases, it can be tough to tell whether a worker is an independent contractor or an employee. The IRS has tests to determine whether or not a worker is an independent contractor or an employee, including: whether the worker receives a steady paycheck (probably an employee) or receives pay for hours worked or for a job completed (independent contractor), who supplies the materials and tools, who sets the work schedule, whether the work is temporary or permanent, and who controls the way the work is done. In general, the more control the employer has over the terms of the work, the more likely a worker is to be an employee.

It’s critical to determine whether or not a worker is an independent contractor or an employee for many reasons. Probably the biggest reason is for tax purposes. If a worker is an employee, the employer must pay a number of taxes on behalf of the employee. If a worker is an independent contractor, the worker is responsible for those taxes.

In addition to the tax issues, there are other legal differences between employees and independent contractors. Employees may receive paid time off, overtime, and other benefits, which independent contractors do not receive. Also, employees are normally covered by workers’ compensation, and independent contractors are not.

It’s normally beneficial for workers to be classified as employees, but it is beneficial for employers to classify workers as independent contractors. If you believe that you have been incorrectly classified as an independent contractor, you should speak with an attorney. If you’re in Los Angeles, call me, Conal Doyle, employment attorney, at 310-385-0567. I can help. Call today to learn more or to schedule a free consultation.