Worker Classification: Employee or Contractor?

Some employers attempt to flout compliance with employment laws by knowingly misclassifying workers as independent contractors when they should be classified as employees. Conversely, many independent contractors attempt to take advantage of their employers by claiming to be employees when they are clearly independent contractors. Proper classification is necessary to ensure entitled workers receive overtime pay, worker's compensation coverage, and unemployment benefits.  

A common-law determination of whether a person is an employee depends on "whether the employer has the right to control the progress, details, and methods of operations of the work". Los Compadres Pescadores, L.L.C. v. Valdez, 622 S.W.3d 771, 780 (Tex. 2021). However, one case may require application of the common-law test, while another case may require the application of specific standards used under the Texas Workforce Commission Act or the Texas Unemployment Compensation Act. Chapter 21 of the Texas Labor Code, Texas' primary anti-discrimination statute, uses a hybrid economic realities/common law control test used by the U.S. Court of Appeals for the Fifth Circuit. Worker classification can be a crucial element to a discrimination claim.  

Employees who suspect they are misclassified and businesses who want to ensure compliance with state and federal employment laws should seek legal counsel to determine whether there is a misclassification issue. If you have any questions about worker classification, please schedule a consultation today. Consultations are completely confidential. Do not rely on this post as legal advice. This post does not create an attorney-client relationship between the firm and the reader. Do not act in reliance on the contents of this post without seeking the advice of counsel.