My old company called me a freelancer. Can I get a severance?

Many of the laws that protect workers from discrimination and wage theft were written for the so-called "old economy," where a company that needed more help would just hire more employees.  But in the so-called "new economy" or "gig economy," many companies think they can achieve greater efficiency by limiting the number of employees they hire, and relying instead on supposedly more flexible sources of labor.  A company may call the people it hires freelancers, or consultants, or contractors, or vendors, or "temporary hires." 

If you have had a long working relationship that is now coming to an end, you may be able to negotiate a severance, even the company you worked for never called you an "employee."  

First of all, the company may have misclassified you.  It doesn't matter what the company called you; it doesn't matter whether the company issued you a Form 1099 instead of a Form W2 at the end of the year.  If you worked on a company's premises every day, if you all the equipment or software or data that you used to do your job was owned by the company, if you were under the day-to-day supervision of company employees, if you did not have final authority over your own schedule and practices, if you were not actively selling your services to a roster of companies, then you might have been an employee.

If your company misclassified you—if it called you as a freelancer or independent contractor even though you were, in reality, and employee—then you can negotiate a severance when you leave, just as any other employee could.  Does your company owe you unpaid wages or overtime?  Do you have any other claims against the company, including for failure to recognize your right to family medical leave, or to accommodation for a disability?  If so, all of these are leverage for negotiating a severance.

But even if your company did not misclassify you when it called you a freelancer or an independent contractor, you may still be able to negotiate a bonus payment at the end of your relationship.  Did the company ever fail to pay your invoices, or pay you less than you were owed on an invoice?  Do you have valuable confidential information, or customer contacts, that the company wants to protect with a new non-disclosure agreement or new non-compete agreement?  Were you issued any stock or shares in the company, in compensation for your work?  All of these could be leverage for negotiating a departing payment from a long-term business partner.

If you are a freelancer and are at the end of a long business relationship, Granovsky & Sundaresh is here to help.  Feel free to call or e-mail us any time.