Is My Boss Misclassifying Me as a Contractor?

 Posted on January 31, 2026 in Wage & Hour Violations

Many workers in Maryland are told they are independent contractors when they should legally be classified as employees. This employee misclassification is not just a paperwork issue. It affects your rights, your benefits, and your paycheck. 

When your employer incorrectly calls you a contractor, you lose out on important protections like:

• Overtime pay

• Unemployment insurance

• Workers' compensation

• Employer-paid taxes

If you believe your employer has misclassified you in 2026, a Frederick, Maryland employment law attorney can help you understand your rights and decide what to do next. Se habla español.

What Is the Difference Between an Employee and an Independent Contractor in Maryland?

The key difference between an employee and an independent contractor is the level of control the employer has over how you do your work. Employees work under the direction and control of their employer. The employer sets the schedule, provides the tools and equipment, trains the worker, and dictates how tasks should be completed. 

Independent contractors, on the other hand, run their own businesses. They decide when and how to complete the work, use their own tools, and have the freedom to work for multiple clients.

Federal law uses a test to determine worker classification. The Fair Labor Standards Act requires courts to look at the relationship between the worker and the employer. Maryland also has its own standards for classification under state wage and hour laws that are even stricter. Both tests consider multiple factors, and no single factor is decisive.

How Do Courts Decide If Someone Is Misclassified?

Establishing that someone is an employee is not always as hard as it may seem, and misclassification is very common. Courts look at several factors to determine whether a worker is truly an independent contractor or should be classified as an employee. These factors include:

• The degree of control the employer has over the work

• Whether the worker has an opportunity for profit or loss based on managerial skill

• Who provides the tools and equipment

• Whether the relationship is ongoing or temporary

Control is one of the most important factors. If your employer tells you when to arrive, where to work, how to do your job, and supervises your work closely, you are likely an employee. If you have the freedom to set your own schedule, decide how to complete projects, and work from wherever you choose, you are more likely to be a contractor.

Another important factor is whether you have the opportunity to earn a profit or suffer a loss based on your own managerial skill. True independent contractors invest in their own equipment, advertise their services, negotiate their rates, and can increase their income by working more efficiently or managing their own team well. Employees are paid a set wage or salary regardless of how efficiently they work.

The bottom line is this: If you are wondering whether you actually might be an employee rather than a contractor, don’t try to determine yourself based on the factors listed above. Talk to an employment law attorney. 

What Are Common Signs of Employee Misclassification?

Several warning signs suggest you may be misclassified as an independent contractor. If your employer requires you to work specific hours or a set schedule, this suggests an employment relationship. True contractors control their own schedules. If the company provides all the tools, equipment, and materials you need to do your job, you are likely an employee. Contractors typically invest in their own tools and supplies.

If you work for just one company and are not allowed to work for competitors or other clients, this suggests you are an employee. However, there are also many cases where employees do work for multiple companies or persons and are still employees (see McFeeley v. Jackson Street Entertainment, LLC, as just one example). Working for more than one person or company does not mean you can’t be an employee of one or all of those companies.

If your employer provides training on how to perform your job, this indicates an employment relationship. Contractors are hired because they already have the skills and expertise needed.

If you receive detailed instructions on how to complete your tasks and someone supervises your work, you are likely an employee. Contractors are given a project or goal and decide independently how to achieve it. If your work is a regular and essential part of the company's business rather than a specialized project, this also suggests employee status.

Why Do Employers Misclassify Workers?

Employers misclassify workers to save money. When a worker is classified as an independent contractor, the employer does not have to:

• Pay payroll taxes

• Pay for health insurance

• Contribute to unemployment insurance

• Pay overtime

The employer also avoids obligations under federal and state employment laws like the Fair Labor Standards Act and the Maryland Wage and Hour Law.

Misclassification saves employers thousands of dollars per worker each year. However, this practice is illegal when the worker meets the legal definition of an employee. The cost savings come directly out of your pocket in the form of lost wages, benefits, and protections.

Call a Frederick, MD Employment Law Attorney Today

If you believe your employer has misclassified you as an independent contractor, you deserve to recover what you are owed. Our Ocean City employment lawyers for employees have a proven track record of getting great results for workers in state and federal court. We offer free case evaluations to help you understand your rights and your options. Call Melehy & Associates LLC at 301-587-6364 to discuss your case today.

Se habla español.