Independent Contractor vs. Employee – News & Why Do We Care

What Is an Independent Contractor?
An independent contractor is someone who runs his or her own business. There has been a trend where more companies are tying to save money by calling people who work for them independent contractors. The benefits to the employer is that they do not have to pay employer taxes, social security, worker’s compensation insurance, vacation, paid time off, sick pay, health benefits, or retirement. The more potential employees covered, the greater the savings to the employer. Companies avoid the employment relationship in several ways. For instance, the can hire employees through temporary employers or simply sign independent contractor agreements directly with the employer.

Recent Cases Highlight this Issue
In Portland, Oregon, a local barber shop called the Modern Man classified its barbers as independent contractors. When the barbers were not being paid they got on the news because they picketed the barber shop. Oregon Live Article. In response to this action, Brad Avakian, the Commissioner of the Oregon Bureau of Labor & Industries, posted the following:

Barbers at Modern Man can contact our agency with claims — we’ll investigate and determine whether they should be classified as employees, not independent contractors.

Posted by Brad Avakian on Wednesday, June 3, 2015

The purpose of determining whether the barbers were independent contractors was to provide better protection to the workers under Oregon’s Wage & Hour laws. This is because Oregon’s wage and hour laws provide employees with the right to sue for their unpaid wages, overtime wages, minimum wages, deducted wages, etc. They also allow the employee to recover their attorney fees. So there are a host of very powerful laws to protect the worker once they are classified as employees. In addition, severe penalties can be levied against the employer and for the employee where the employer fails to pay all wages as required by Oregon law.

In federal court, the Ninth Circuit found that FedEx misclassified its delivery drivers as independent contractors in both Oregon and California. The point is that these types of misclassifications are everywhere. It is not just the small time shops, like Modern Man that make the mistake. Instead, large sophisticated companies like FedEx, and every size company in-between, make this mistake. Sometimes client fear larger companies, thinking that they have powerful attorneys on their side, but obviously large companies can perform unlawful actions as easily as the small ones.

How to determine if you are an Independent Contractor or employee
To determine whether a person is properly classified as an employee or as an independent contractor is complex. Both state and federal wage and hour law use a version of the “economic realities” test to determine whether a person could be classified as an independent contractor. Technical Assistance. The economic realities test essentially looks to determine whether and to what degree the worker is economically dependent upon the putative employer. The best way to determine if you are misclassified as an independent contractor is to call Schuck Law at (360) 566-9243 because the test gets significantly more complex as you attempt to apply facts to it. Independent Contractor page.

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What can I do, my employer will not pay my final paycheck (Oregon)

Final Paycheck Laws and Penalty Wages in Oregon
Oregon wage and hour law sets very specific time lines when all wages are due. Late Pay Page. While there are a few minor exceptions regarding when final paychecks (wages) are due, they rarely apply. ORS 652.140. Oregon wage and hour law sets the following basic time lines for payment of all final wages/paychecks: (1) When an employer discharges an employee or when employment is terminated by mutual agreement, the final paycheck, including all wages earned and unpaid, become due not later than the end of the first business day after the discharge or termination. (2) When an employee who does not have a contract for a definite period quits employment, the final paycheck, including all wages earned and unpaid at the time you quit, become due and payable immediately if the employee has given to the employer not less than 48 hours’ notice, excluding Saturdays, Sundays and holidays, of intention to quit employment. (3) When the employee quits and has not given 48 hours’ notice, the final paycheck, including all wages earned and unpaid, become due within five days, excluding Saturdays, Sundays and holidays.

You are Likely Due Penalty Wages if Your Final Paycheck was Late
Where the employer fails to timely pay all final wages at separation from employment (termination or quit), generally the employee can recover the wages, plus penalty wages. By all wages, the law means everything. For instance, if the employer makes an unlawful deduction during employment, those wages still remain due and must be timely paid at the end of employment. Deduction Page. Also where the employer does not pay for all hours worked, like an off-the-clock situation. Hours Worked. In such situations, the employer did not pay all wages in the final paycheck. Penalty wages are duce only where the failure to pay was willful, but willful does not carry a common meaning. Willful for penalty wages generally means that the employer is free to determine what it will pay, and chooses to pay the final paycheck when it did and in the amount it did. Penalty wages for a late final paycheck are calculated by multiplying the regular hourly rate (could be salary or commissions reduced to hourly rate) for 8 hours per day until paid. There is a maximum of 30 days for the penalty. Thus an employee earning $15 per hour could be due up to $3,600 in penalty wages if his employer failed to pay final wages for 30 days. Under the right circumstances, other damages or penalties could be assessed under either federal or state wage and hour laws. Such as where the employer fails to pay overtime wages, or minimum wages.

Costs and attorney fees
In most situations where the employee wins their case proving that the employer did not timely pay their final paycheck timely, or that the final paycheck did not include all wages, attorney fees and costs are awarded in addition to the amounts owing the employee under Oregon wage and hour law. This makes it possible for the wage and hour attorneys at Schuck Law to take wage claims on a contingent basis essentially being paid to win the wage claim lawsuit for the employee and have the employer pay the fees and costs.

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Oregon Wage Deduction Limitations

Oregon Wage Deduction Limitations
Generally Oregon law limits the deductions employers can take from the wages of its employees. Generally speaking, if it is not taxes, garnishments, or voluntary payments for the benefit of the employee, little else can be deducted. The specific details can be found in ORS 652.610 subsection three. ORS Ch. 652. In addition to limiting what may be deducted from an employee’s paycheck, the statute also requires that the employer track the payment and inform the employee of the reason for the deduction. The simple fact that the paycheck does not correctly show the deduction may be enough to make an otherwise lawful deduction unlawful.

Whether or not a deduction is unlawful can be a huge difference in the value of a wage claim to the employee. When an employer unlawfully deducts wages, the employee is due the greater of $200 or damages. Usually the damages are the amount of the deduction, but could be the value of any loss to the employee. For instance, if the employer deducts medical payments from the employee’s wages, but does not purchase medical insurance for the employee, the employee may be in a position to argue that the cost of medical appointments or procedures are their damages. Damages could also arguably include bounced check fees, late payment fees on loans, or any other damage sustained as a result of the unlawful deduction.

More often than not, the amount of the deduction is the damage. However, this is not the only wage and hour laws that the unlawful wage deduction likely causes. For instance, if the employee works at or near minimum wage, the wage deduction may cause the employee to be paid less than minimum wage. This may entitle the employee to a civil penalty under Oregon wage and hour laws. Minimum Wage Page. The Oregon minimum wage civil penalty can equal a maximum of 30 days of wages.

Another Oregon wage and hour law that may be violated by an unlawful deduction is the failure to pay all wages timely upon the ending of employment. Under ORS 652.140, an employer must pay all final wages at the end of employment within a specific time period depending upon how the employment ended. Late Pay Page. Like the minimum wage civil penalty, where an employer fails to pay final wages timely, the employee is due up to 30 days of penalty wages. The penalty wages are calculated by multiplying the regular hourly rate by 8 hours per day for up to 30 days. So an employee earning $15 per hour could receive up to $3,600 for the late payment wage claim under Oregon law.

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Class Action Wage Claim Attorneys.

Class Action Wage Claim Attorneys
The lawyers at Schuck Law, LLC focus their law practice on wage claim lawsuits. Our lawyers regularly prosecute Oregon minimum wage claim lawsuits.  In addition, our attorneys regularly prosecute Oregon unpaid wages lawsuits, Oregon overtime pay lawsuits, and Oregon wrongful deduction lawsuits.  Our attorneys are also experienced in prosecuting minimum wage class action lawsuits as well as other class action wage claim lawsuits. In addition to the claims for damages outlined above, an employee may also sue to recover their costs, disbursements, and attorney fees incurred in prosecution of the minimum wage claim lawsuit. This allows the attorneys at Schuck Law, LLC to take most minimum wage and other wage claim lawsuits on a contingency fee basis. This means, with minor exceptions that are within your control, that our attorneys only get paid their attorney fees if they recover wages, penalties, penalty wages, or other damages for you.

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