It’s becoming increasingly common for New Yorkers to earn their living through self-directed, freelance, or contractual work. This type of work is now known as the gig economy. These arrangements can come with many benefits, including the freedom to set your own hours and pick and choose projects.

But although this type of work is increasingly popular, many workers who earn their living this way don’t understand the full extent of their rights or their employers’ legal obligations.

Many companies will hire workers as independent contractors, but then set performance expectations and work parameters that are much more in line with that of a full-time employee.

Employers often do this to avoid paying workers the benefits and level of compensation normally given to full employees. Not only is cutting costs by intentionally misclassifying independent contractors illegal, it also deprives workers of the rightful protections and pay they deserve for this level of work.

What Is the Difference Between An Independent Contractor And An Employee In New York?

Put simply, independent contractors are workers who are in business for themselves, serving clients or customers rather than a single company or employer.

Generally, independent contractors have more flexibility in their working conditions. They’ll often serve a variety of clients, set their own working hours, and are able to work under conditions relatively free of direct supervision from their clients.

Individuals working as independent contractors also may:

Have an established business
Advertise for clients in electronic or print media
Keep their own place of business
Provide services using their own equipment, tools, and supplies
Set or negotiate their own pay rate
Refuse work offers
Hire help or subcontractors
Work for more than one company at a time
Earn a profit or suffer a loss as a result of their work

Under Federal and New York law, no single factor in a working relationship definitively makes someone an employee. Instead, courts have said that employee status is determined by considering various factors in the employer-worker relationship.

Ultimately, whether or not someone is an employee depends on how much supervision, direction, and control an employer has over their work.

The more control that an employer has over the circumstances of a worker’s day-to-day labor, the more likely that they’re in an employer–employee relationship, not an employer–independent contractor one.

Someone is likely an employee if their employer habitually does any number of the following things:

Chooses when, where, and how they perform their services
Provides facilities, equipment, tools, and supplies
Directly supervises the services
Sets the hours of work
Sets the rate of pay
Requires exclusive services (i.e. that you can’t work for competitors)
Requires attendance at meetings and/or training sessions
Asks for oral or written reports
Reserves the right to review and approve the work product
Requires prior permission for absences

How you are paid can also be an indicator of employment status. Employees are usually paid by hourly rate or salary, while independent contractors are generally paid by the project or task.

I have been litigating the issue of whether a worker is an employee or an independent contractor for over 25 years. While I have literally handled thousands of cases, there are three that I always like to point out because they are reported decisions by two different appellate courts in New York.

The three cases I point out are as follows:

1. Barak v. Chen

a. This case can be viewed here: https://casetext.com/case/barak-v-chen-3

2. Chaouni v. Ali

a. This case can be viewed here: https://casetext.com/case/chaouni-v-ali

3. Castro-Quesada v. Tuapanta

a. This case can be viewed here https://casetext.com/case/castro-quesada-v-tuapanta-2

I am proud of my work on these cases for several reasons. First, it shows that the legal system can and does work. In all three cases, the lower court denied my motion for summary judgment. I then appealed to the Appellate Court in New York and convinced a panel of judges that my position was correct. In all three cases, the court reversed the lower court's decision and directed that summary judgment be granted and the cases were dismissed.

This is important because it means that just because one judge did not rule in your favor does not mean you have no legal recourse. An appeal can be costly and time-consuming, but it is an essential tool to protect your legal rights.

Next, not only did these courtroom victories make my clients happy, but these cases helped to shape the law in the State of New York on the issue of when one is and is not an employee.