Do you feel trapped in a job that classifies you as an independent contractor when you should be a non-exempt employee? Sadly, independent contractor misclassification is a widespread problem in Los Angeles and statewide in California and has serious consequences. Misclassified employees are often underpaid and do not receive their rightful benefits and protections.
Most employers in California must follow strict laws on minimum wage requirements, overtime pay, workers’ compensation benefits, and meal breaks. However, some misclassify employees to save money and reduce their responsibilities. Hardworking employees are left out of pocket, and the labyrinth of California labor laws can leave them unsure about where to turn.
If you have been misclassified as an independent contractor, you need an advocate who is passionate about employee rights to fight aggressively for the fair pay and compensation you deserve. The independent contractor misclassification attorneys at Allred, Maroko & Goldberg are ready to hear your story and explain your legal options. Call 323-746-1853 today for a free consultation with a Los Angeles employee misclassification attorney.
Understanding Employee Misclassification
The State of California Department of Industrial Relations (DIR) explains that employee misclassification happens when “an employer improperly classifies their employees as independent contractors so that they do not have to pay payroll taxes, minimum wage or overtime, or comply with other wage and hour law requirements such as providing meal periods and rest breaks.”
An Allred Maroko & Goldberg employment misclassification attorney can analyze your case and advise you whether there is a basis for legal action. If your employer has denied you the wages and benefits you are entitled to under California law, our misclassification attorneys could fight tenaciously for the wages, overtime, and benefits that you have been underpaid. You may also be entitled to interest on unpaid overtime and your attorney’s fees.
The impact of employee misclassification
Employee misclassification is a form of fraud. According to the National Employment Law Project (NELP) Policy Brief, October 2020, it is often a matter of racial injustice. Poor workers of color and immigrant workers are more likely to be misclassified as employees and miss out on fair pay and working conditions.
When a worker is not an independent contractor but is classified as such, they lose out on the following benefits to which non-exempt employees are entitled:
- Workers’ compensation insurance
- The right to join a union
- Unemployment insurance
- Family leave rights
It is clear that employee misclassification is about more than labels. It is a violation of your legal rights and a way to deprive employees and the state and federal government of the funds they deserve. A misclassification attorney with Allred, Maroko & Goldberg can help you understand whether your job has been misclassified and explain your rights under California employment law.
Types of employee misclassification
According to the National Employment Law Project (NELP), there are three main ways employers can engage in employee misclassification:
- Independent contractors: An employer may insist that employees call themselves independent contractors, even when they are not running their own businesses. Businesses can legitimately employ independent contractors to carry out specific tasks. However, if California workers meet the state law’s definition of a non-exempt employee, they must be classified as such.
- Contract requirements: An employer may require employees to form a legal entity, such as a franchise company-of-one or a limited liability corporation, as a condition of employment. Sometimes, this is legitimate, as it forms a business-to-business relationship. However, if an employer does this to avoid paying employer-related taxes, this could be an attempt to misclassify employees.
- Paying off the books: Skipping payroll altogether and paying employees off the books is a form of fraud.
Some employees try to get all the benefits of having employees while trying to claim they are independent contractors. For example, they may make so-called independent contractors sign highly detailed contracts that impose strict requirements on workers. However, true independent contractors can establish their own contract terms and maintain the flexibility that comes from this type of work.
Industries affected by employee misclassification
There are misclassified workers in all industries. However, this practice is particularly rampant in the following types of businesses:
- IT
- Hospitality
- Healthcare
- Customer service
- Construction
- Sales
If you believe your employer has misclassified your role and denied you your rightful benefits and wages, talk to an Allred Maroko & Goldberg employee misclassification attorney. Our employment lawyer will listen carefully to your story and explain your legal options.
Employment Status Under California Employment Law
Under California law, there are two types of employees: exempt and non-exempt.
Exempt employees meet certain criteria and are exempt from certain benefits and legal protections that non-exempt employees enjoy. For example, exempt employees are not entitled to overtime pay or meal and rest periods. However, they receive a salary and are exempt from some record-keeping requirements.
Non-exempt employees must track their working hours but are guaranteed a minimum wage, receive overtime pay, and are entitled to meal and rest breaks. As of 2025, the minimum wage for non-exempt employees in the City of Los Angeles is $17.28 ($17.27 in LA County). Non-exempt employees are at higher risk of being misclassified.
Determining Your Employment Status
California employment law is complex, so it is important to consult an experienced employee misclassification lawyer for accurate legal advice. However, the following guidelines can help you understand whether your employment status has been misclassified.
The ABC test
On January 1, 2020, Assembly Bill 5 (AB5) came into effect. This law requires employers to apply the so-called “ABC test” to establish whether a worker is an employee or independent contractor under California law.
The ABC test establishes that a worker is an employee and not an independent contractor unless the hiring entity satisfies the following criteria:
- A: The worker is not controlled and directed by the hiring entity
- B: The work performed is outside of the normal course of the hiring entity’s business
- C: The worker normally performs the same type of work in an independently established business
In 2020, Proposition 22 was also enacted, which allows gig workers to continue to work with companies such as Uber, Lyft, and DoorDash as independent contractors. While Proposition 22 provides guaranteed minimum earnings for gig workers, it does not entitle them to sick pay, unemployment insurance, and other benefits.
Unsurprisingly, many employees are unsure about how AB5 and Proposition 22 affect their jobs. It is important not to assume that your job does not meet the ABC test or that Proposition 22 applies to you and limits your rights. Instead, talk to an Allred Maroko & Goldberg employee misclassification attorney, who will patiently guide you through your rights and explain whether you can take legal action.
Salary requirement for exempt employees
To be an exempt employee, you must be paid a fixed salary, not by the hour. Your salary must be at least double the state minimum wage. As of 2025, that amount is approximately $71,800.
In certain fields, there are exemptions from several of these laws. An experienced employee misclassification attorney can advise you on whether your role has been misclassified. However, the majority of employee misclassification claims involve non-exempt employees being misclassified as independent contractors.
Job responsibilities
Generally, the more responsible or skilled an employee’s job is, the more likely he or she is to be classified as exempt. This also applies if your job requires you to make decisions, use your discretion, or exercise independent judgment.
For example, the professional exemption specifically applies to employees working in “law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting” or an employee “who is primarily engaged in an occupation commonly recognized as a learned or artistic profession.”
Other exemptions that have been established under California law include:
- Executive, administrative, and professional employees
- Taxicab drivers
- Student nurses
- Outside salespersons
- Computer software employees
The specific requirements of each exemption vary. For example, the exemption for computer software employees has its own minimum wage requirements. As of January 1, 2025, the California DIR requires a minimum hourly rate of $56.97 or $118,657.43 a year to qualify for this exemption.
Compensation for Misclassified Workers
With a tenacious, independent contractor misclassification attorney on your side, you can fight for compensation for the following:
- Unpaid meal and rest breaks at the employee’s regular pay rate
- Unpaid wages due to violations of minimum wage laws
- Legal fees and court costs
- Interest on unpaid wages and benefits
- Unpaid overtime wages
To achieve maximum compensation, you need the legal knowledge and experience of a Los Angeles employee misclassification attorney. Your lawyer can untangle state and federal labor laws and explain how these apply to your case. What makes an Allred, Maroko & Goldberg employee misclassification lawyer the right choice for Los Angeles workers?
Why You Should Choose an Allred Maroko & Goldberg Employee Misclassification Attorney
Taking legal action against your employer demands bravery, tenacity, and a strong desire for justice. To give yourself the best chance of success and recovering maximum compensation, you need an experienced Allred Maroko and Goldberg employee misclassification attorney by your side every step of the way.
Established almost 50 years ago, Allred, Maroko & Goldberg is one of the biggest and most formidable employment law firms in California. Several of our attorneys were named among the 500 Leading Civil Rights & Plaintiff Employment Lawyers in the Country for 2024. We have recovered over $1 billion in compensation for our clients, so you can trust us to fight for all unpaid wages and compensation owed to you.
Discover what our Los Angeles employee misclassification lawyers can do for you today. Call 323-746-1853 to schedule a free initial consultation with Allred, Maroko & Goldberg, or complete our confidential contact form, and we will call you back soon.