Independent Contractors in the Pandemic
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Despite the fact that Massachusetts law strictly limits who can be paid as an independent contractor, the reality is that many people are providing services without being properly classified as a W2 employee. Some of the consequences of being classified as an independent contractor have become even clearer during the pandemic.
The federal government addressed one of these concerns by passing the CARES Act. Among other provisions, the Act provides that independent contractors and self-employed individuals could apply for unemployment benefits during the coronavirus outbreak. There are other important protections, however, that remain unavailable to independent contractors. These include paid sick days, protected and paid time off under the recently enacted emergency family and medical leave provisions, and statutory protection for payment of wages. In addition, many independent contractors and gig workers are not covered by workers compensation insurance 1099 Employee- Is It Legal in Massachusetts?
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Need Help With an Independent Contractor Issue?
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The truth is most people in Massachusetts who are paid as independent contractors should be considered employees. You can read more about these three tests on our Massachusetts Independent Contractor law page. The short answer is that is only legal to be paid as a 1099 if all three of the following are true:
If you are having trouble collecting unemployment, or find that important employee benefits are not being made available you because of your 1099 status, you might want to consult an attorney about whether you are properly classified.
- You are free from control and direction in your work.
- You offer the same services to others.
- The work you do is not part of your employer's core business.
If you are having trouble collecting unemployment, or find that important employee benefits are not being made available you because of your 1099 status, you might want to consult an attorney about whether you are properly classified.
Independent Contractors and Unemployment Benefits
Generally speaking independent contractors are not eligible for unemployment benefits if they are fired or laid off. In response to the coronavirus pandemic, Congress passed the CARES Act in March 2020. Among the provisions of the CARES Act is authorization for states to provide unemployment benefits for independent contractors, gig workers and self-employed individuals.
Pandemic unemployment offered significant benefits for individuals who would not otherwise have had access to benefits. The system, however, was implemented on an emergency basis, and there was a lot of confusion surrounding the applications and approvals for pandemic unemployment.
Now, the state is aggressively seeking (in part due to mandates that came with the federal money for unemployment) to recoup any amounts that might have been paid in error. As a result, many people who received pandemic unemployment are receiving notices claiming "overpayments" to them under the program. The amount of the claimed overpayment can be as high as $40,000.
If you have received an overpayment notice, we can help you appeal the determination, and/or apply for a waiver of overpayment.
Pandemic unemployment offered significant benefits for individuals who would not otherwise have had access to benefits. The system, however, was implemented on an emergency basis, and there was a lot of confusion surrounding the applications and approvals for pandemic unemployment.
Now, the state is aggressively seeking (in part due to mandates that came with the federal money for unemployment) to recoup any amounts that might have been paid in error. As a result, many people who received pandemic unemployment are receiving notices claiming "overpayments" to them under the program. The amount of the claimed overpayment can be as high as $40,000.
If you have received an overpayment notice, we can help you appeal the determination, and/or apply for a waiver of overpayment.
Independent Contractors and COVID relief
Before the CARES Act, Congress passed the Families First Coronavirus Relief Act ("FFRCA"). This contained important benefits for employees, including up to two weeks of paid sick time and paid emergency leave under the Family Medical Leave Act. In combination, these two benefits could mean as much as $15,000 in compensated time for workers affected by COVID-19.
As a self-employed individual or independent contractor, however, you were not eligible for these benefits. You also do not have the protection of the Massachusetts Earned Sick Time law, or state and federal law that protects employees against retaliation for taking medical leave or sick time. In addition, unless you opted to pay into the Paid Family and Medical Leave program, paid leave benefits now available to W2 employees are not available to you.
Another issue is delayed payment of wages. An employee who is not paid wages has specific recourse under the Wage Act. This recourse includes recovery of three times the amount owed, as well as reimbursement for legal costs and attorneys' fees. The Wage Act also allows a claim to lie against the individual owners and officers, not just the business.
As an independent contractor, you do not have these protections. You can bring a claim against the company for breach of a contract to pay you (you do not need a written contract for this). You will not, however, have the same recourse as an employee.
Outside of the COVID-19 situation, there are additional benefits you may be missing out on if you are providing services. These include health insurance, vacation time and paid sick time under state law and, in most cases, access to workers compensation benefits if you are injured on the job.
As a self-employed individual or independent contractor, however, you were not eligible for these benefits. You also do not have the protection of the Massachusetts Earned Sick Time law, or state and federal law that protects employees against retaliation for taking medical leave or sick time. In addition, unless you opted to pay into the Paid Family and Medical Leave program, paid leave benefits now available to W2 employees are not available to you.
Another issue is delayed payment of wages. An employee who is not paid wages has specific recourse under the Wage Act. This recourse includes recovery of three times the amount owed, as well as reimbursement for legal costs and attorneys' fees. The Wage Act also allows a claim to lie against the individual owners and officers, not just the business.
As an independent contractor, you do not have these protections. You can bring a claim against the company for breach of a contract to pay you (you do not need a written contract for this). You will not, however, have the same recourse as an employee.
Outside of the COVID-19 situation, there are additional benefits you may be missing out on if you are providing services. These include health insurance, vacation time and paid sick time under state law and, in most cases, access to workers compensation benefits if you are injured on the job.
Misclassification as a 1099 Employee: What You Can Do
If you do not meet the tests for classification as an independent contractor, you may have a remedy under the Wage Act against the company you provide services for and certain owners and officers of the company individually.
if you are successful in a misclassification claim, you can recover three times the amount of any damages you prove, as well as your legal costs and attorneys' fees. This may be an option you wish to pursue, particularly if you are suffering as a result of the coronavirus pandemic and cannot access the same paid sick time and leave as W2 employees.
if you are successful in a misclassification claim, you can recover three times the amount of any damages you prove, as well as your legal costs and attorneys' fees. This may be an option you wish to pursue, particularly if you are suffering as a result of the coronavirus pandemic and cannot access the same paid sick time and leave as W2 employees.
How We Can Help
We have helped many people in your situation assess their employment status and get compensation for damages they have suffered. We would love to help you get clarity on your rights and obligations, and take the steps you need to take to protect your rights. You can use the button below to schedule a call back from a member of our team, give us a call at 781-784-2322, or fill out our web form to let us know a little more about your situation.
