How Does New York Determine Whether I'm An Employee or An Independent Contractor?

When it comes to determining your status as an employee or an independent contractor, New York courts have relied upon a variety of factors to help draw a distinction between these classifications. Although New York and federal employment laws rely upon a series of different tests to classify workers, the main focus amongst each of these is typically the level of control that the employer has over the worker's means and methods of completing the job for which they were hired.

Being classified as an employee vs. an independent contractor can mean the difference between having or lacking access to the protections afforded by the minimum wage, overtime, paid sick leave, unemployment and worker's compensation laws, amongst many others. These issues almost always arise in litigation where, for example, a former worker might claim they were an employee and the employer argues they were an independent contractor and not protected by whatever law the worker is suing under. In fact, sometimes these issues are pivotal to whether the litigation can even move forward. Depending on the type of case, if a court finds that a worker was not an employee, the lawsuit could be dismissed.

According to the New York Common Law test, whether a traditional employment relationship exists or whether a worker can be considered an independent contractor, depends upon the following factors:

Whether the employer retains the power to select and engage the individual
The employer's method of payment for services rendered by the individual
Whether the employer has the power to dismiss the individual; and
The extent of the employer's power of direction and control over the individual's activities.

As I've stated earlier, the most essential element for establishing an employment relationship is the right of control. In order to determine whether an employer has control over a worker, the courts have looked at all aspects of the relationship, especially concerning the employer's right to exercise supervision and direction over the manner and method of how work is performed. In assessing whether the employer exercises control over the worker, the New York courts consider the following additional factors:

The extent of the alleged employer's supervision and control over the worker's work
The proportion of worker's time that was devoted to performing the employer's work
Whether the employer dictates the time, place, and method of performance of the worker
Whether the worker held himself/herself out as an independent contractor
The method of payment (i.e., salary or flat fee commission)
Whether the employer had the power to discharge the worker
The nature of the work performed by the worker
Whether the employer set the hours of work, required attendance at meetings and/or training programs, or required prior permission for absence from duties
Whether the employer provided facilities, equipment, tools, or supplies used by the worker in the performance of his or her work
Whether the employer withheld taxes
Whether the employer provided fringe benefits, and if so, at whose cost
Whether the employer reimbursed the worker's expenses
Whether the employer controlled solicitation and billing of customers
Whether the worker used business cards or other identification indicating that he or she was a representative of the employer
Whether the employer restricted the worker's performance of services for others

No single factor or group of factors is conclusive in classifying the relationship and courts weigh these factors to reach their determination. Most importantly, since actual control is the critical element, the label that the parties place on themselves is not definitive. So, if there is a written agreement between the parties that labels the worker an independent contractor, but the employer exercises total and complete control over the worker's tasks, actions and responsibilities, a court will likely find them to be an employee.

If you are concerned that you are not properly classified as an employee at work and being denied benefits and protections to which you are entitled, reaching out to a competent employment lawyer will be the first step towards protecting your rights.

Disclaimer: This blog post and similar posts are not to be considered as providing legal advice. The discussion here is meant for educational and informational purposes only and shall not create an attorney-client relationship with the readers of this content.