What are warning signs of employee misclassification?

Many people refer to the modern American economy as a gig economy. In other words, many workers no longer have the protection of full-time employment. Instead, they do short-term work or work as a contractor for the same client for a long period of time. Working as a contractor allows someone to have control over their schedule and what work they choose to perform.

Working with contractors benefits companies, as they don't have to incur the expenses of hiring an employee when they don't have adequate work to maintain an employee year-round. Unfortunately, a growing number of businesses have decided to abuse the independent contractor classification for their own financial gain.

Why companies abuse classification systems

When a company classifies a worker as a contractor and not an employee, they avoid the legal obligation to provide unemployment insurance, workers' compensation coverage and similar benefits. An employer also avoids their obligation to contribute to employment taxes on behalf of the worker.

Inaccurate classification as a contractor instead of an employer could impact you because you have to pay more in taxes. It could also cause problems if you get hurt on the job and discover you can't receive workers' compensation. Figuring out sooner rather than later that your employer intentionally misclassified you can help you take action to protect yourself.

Are you really an employee?

There is a blurry line between independent contractor and part-time employee. Trying to figure out which you really are under law isn't always easy. However, there are certain important clues that can help you determine if your status as a contractor is inappropriate.

If the job you perform is part of your employer's daily routine work that they rely on for business, you may be an employee. If the company involved provides equipment to you, you may be an employee. If you are subject to management or micromanagement, such as an inability to choose your workload or specific requirements for when to start and stop your work, you may be an employee and not a contractor.

There are more nuances to it than just that, but those three main issues are often core to determining whether your employer intentionally misclassified you. If your job duty is part of the regular business operations and you are subject to managerial oversight, your independent contractor classification may be little more than a house of legal cards constructed to help your employer save a little bit of money.

You can push back against fraudulent classification as a contractor

Employers who violate the law will continue to do so as long as it benefits them. Taking action and causing financial consequences for these ethical and legal misdeeds can remove the incentive from your employer and prevent them from continuing to engage in such inappropriate conduct.

That compensation can also help make up for the strain and inconvenience you experienced as a result of the misclassification of your position with the company.

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