Discrimination for Motherhood

Question

I need some advice. In 2018, I joined a startup. They paid me as a contractor because they said they couldn’t afford the taxes and I’d be able to deduct more anyway. I was being paid well enough that it didn’t bother me. Shortly after being hired (about 3 months) I became pregnant, and in 2019 had my baby. When I returned to work, they made me take a major pay cut (cut by about $15K annually) and continued to pay me as a contractor even though I was an employee. I was feeling extremely trapped bc they tried to claim 2 weeks of maternity leave was “enough”, fired me when my son was in the hospital at 5 weeks old for a surgical procedure, re-hired me for an even lower salary a few weeks later (when I was vulnerable and terrified and having trouble finding other work). So recently I got a new job at an amazing company and I’m just looking for advice on a few things. 1.) I am filing my taxes and being charged an astronomical tax amount which I feel they should pay because they paid me as a contractor so that THEY could avoid paying their taxes. Do I have any legal recourse? Can I report them so they have to pay employees right even with me gone? 2.) Do anti-discrimination laws apply to people paid as contractors as well? I really just want to make sure she doesn’t do this to anyone else. Thanks in advance!

Anonymous · Answer

Caveat that you should really talk to an employment lawyer in your state, especially since state laws can vary substantially on this issue, and because they will be able to advise you specifically on your own individual circumstances.

In general, employees who are misclassified as independent contractors  under federal law (Fair Labor Standards Act) have a private right of action, and would also be able to report misclassification to the Department of Labor.

Anti-discrimination laws can apply to people who are employees who are misclassified as independent contractors. Federal anti-discrimination laws, though, for the most part do not apply to employers below a certain level of employees (e.g. Title VII and the Pregnancy Discrimination Act only apply to companies with 15 or more employees.) Employees would also need to file a complaint with the EEOC or state fair employment practices agency first before filing suit, and there’s a pretty short timeframe to do so (180 to 300 days depending on the circumstances).

Anonymous · Answer

Clarifying: they hired you as an employee but didn’t do the payroll taxes? Strikes me as very illegal. Lawyer up!

Jmaciveredwards · Answer

Speak with an employment lawyer

Lynne Cogan · Answer

Congratulations on finding a great new job.

You are being given excellent advice here.

To better determine whether you were an employee or contractor, here is a link to the Department of Labor Fact Sheet #13: Employment Relationship Under the Fair Labor Standards Act (FLSA) to help determine whether you were truly an employee or contractor.

Also, I wrote an article (https://lnkd.in/gGF6DEc) about this a couple of years ago on LinkedIn that discusses the above in more detail, along with providing links to a couple of other articles about this.

Linda Gillingham Sciaroni · Answer

Yes, being asked to pay ones taxes with out with-holding can be a cruel shock and important lesson to anyone who is being paid as a contractor.  They choose to hire you as a contractor and you accepted the contract. It can be a better deal, because you can deduct a home office and many work perks/benefits you desire, directly from your pay.

It seems you have a misconception. Do employers pay our taxes? As an employee we have our taxes withheld from our checks to help us be prepared to pay our taxes.  I earn $8000 a month, but I only receive $5000.  You received the entire $8000 and you need to deposit quarterly to make sure you have your taxes saved in time for the April deadlines.

I do not know that you will gain much by your law suit,

Contractors do not have vacation nor medical leave.  Generally, the expectation is you save for those occasions from your pay. You decide when you work and when you are off. I do not know how they paid you for your leave, but I suspect they did not pay you, they just said you can continue as a contract worker when you are ready, we will renew your contract.

DeborahORell · Answer

Reiterating much of the same.
Consult with a qualified employment lawyer in your state.  Laws vary widely.
Pregnancy Discrimination.  You are/were  entitled to a protected leave regardless of company size.  
Don't file with the EEOC unless you've spoken with an employment lawyer.  FIND A LAWYER FIRST.  You need to file there if you intend to go into federal court.  (Which what you're shared wouldn't be something a law firm would spend 4-7 years litigating.)  Sometimes people believe the EEOC will get them the gender justice they seek.  The facts are they don't.  And if you did need to file, and you have an attorney, they will write a much better charge that might actually get some traction.  
Yes, it sounds like you were mis-classified.   If it looks like an employee, acts like an employee, smells like an employee.  you were an employee.  Here you would want an employment attorney or an attorney who concentrates on FLSA - wage and hour issues.

Victoria Stanislavovich · Answer

if they paid you as a contractor they have to know: contractors are required to provide their own means to do work meaning you have to have your own computer, tools if you need them, cellphone, business cards, etc. If they provided you with any of that they are in breach of contracts. Also if they gave you maternity leave you are indeed an employee because contractors do not get that benefit. 
But I would definitely speak to a qualified attorney

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