Has Your Employer Misclassified You to Avoid Compensating You?

Employee misclassification is one of the most common problems in the workplace.

In some cases, misclassification is a mistake and an employer just doesn’t understand the different classifications or their responsibilities concerning each type. But in other cases, employers intentionally misclassify employees to avoid providing benefits.

If you’ve been misclassified and your employer insists you’re an independent contractor (IC) when you’re fulfilling the duties of an employee, what can you do?

What You Miss Out on When You’re Misclassified

First, it’s important to understand why employee classification is so important.

Independent contractors typically have more freedom than employees, but the trade-off is their loss of benefits. They’ll likely not receive paid vacation time or sick time or health insurance coverage, even if they spend 40 or more hours per week working for a company.

Additionally, an employer might not pay workers’ compensation insurance premiums for a contractor, which means things can get dicey if the IC is hurt on the job. By law, employers must provide workers’ compensation coverage for employees, so they receive automatic protection. This isn’t the case for IC’s though.

This means misclassification of employees causes two problems.

One, it puts employees at risk for not receiving benefits if they are injured on the job. Two, it shorts the state’s workers’ compensation funds. Additionally, if an employee is misclassified, it also means the employer is mishandling:

• Unemployment insurance (UI)
• Social Security
• Tax withholding
• Temporary disability
• Minimum wage and overtime laws that protect workers

Intentionally misclassifying employees as ICs is a practice that causes a variety of harm and puts people at risk.

• To learn more about the problem of employee misclassification in New York, check out this information from the NY Department of Labor.

How Do You Know You’re an Employee and Not an IC?

In general, if a person has the right to control and direct their work and determine how tasks are accomplished, he or she is an independent contractor.

Additional factors to take into consideration when determining how a worker should be classified include:

• Who supplies the equipment and tools needed to perform job tasks?
• How is the worker paid?
• Can the worker be fired?
• Does the employer have control over the worker?
• How are taxes handled?

As the title indicates, independent contractors have more independence and are free to do more than employees, but they receive fewer benefits and protections under the law.

What Can You Do If You’ve Been Misclassified?

The average worker doesn’t realize he or she has been misclassified until there is a problem.

For instance, many workers’ compensation denials are linked to misclassification. You’re injured on the job, you apply for benefits, and you’re denied because you are an independent contractor.

In other cases, a worker realizes other benefits should be available when they are not and the reason given by the employer is because the worker “isn’t really” an employee. In most legitimate independent contractor arrangements the IC knows from the beginning how they are classified and understands the ramifications of this classification.

Chances are if you’re supposed to be an Independent Contractor you know it.

If you have questions about how you are classified or you believe an employer has misclassified you, there are things you can do to fix the situation.

For more information or to speak to someone about employee misclassification, contact Borrelli & Associates, P.L.L.C. for more information.