If a person works in a company with the understanding that they are not “employees” and are paid cash do they have employee rights?

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If a person works in a company with the understanding that they are not “employees” and are paid cash do they have employee rights?

I own an auto shop. I hired an individual, who needed financial help, to do small cleaning jobs and to learn the trade. He worked off and on and was paid cash for the days he worked. He demanded to become part of payroll, but I own and run the company therefore I have no employees other than myself. I am now being sued by this person for alleged non-payment, I just needed to know what to expect, since nothing was ever signed or written down.

Asked on June 4, 2009 under Business Law, California

Answers:

B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

I think you have a large problem here, and that you need to have a labor and employment attorney review all the facts of your case, to help find the least painful way out of this mess.  One place to find a lawyer is our website, http://attorneypages.com

Someone who works in your company is one of two things:  an employee, or an independent contractor.  An indendent contractor has to be in some way independent, doing his job (which usually involves some fairly advanced technical or professional skill) in the way he sees fit, with only very general direction from you.  Someone who is sweeping the floors and getting you tools and parts while you show them what you're doing can't be an independent contractor.  This man is an employee, whether you like it or not.  And, more than likely, the same is probably true for pretty much everyone who works for you, as well, and you can probably expect visits from the tax people, state and federal, after this goes to court.


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