There are a variety of different ways of taking advantage of employees, unfortunately, and one of those ways is through employee misclassification. Employee misclassification occurs when an employee is designated as an independent contractor when the employee should not be classified as an independent contractor. Employee misclassification is a form of fraud and helps employers avoid labor costs. It can also harm employees.
Ways employees can be harmed by employee misclassification
When misclassification of employees occurs, employers do not have to pay payroll taxes, do not have to pay minimum wage, do not have to pay overtime and do not have to comply with wage and hour law requirements for such as rest breaks and breaks for meal periods. This can leave employees without important protections they should be entitled to receive.
Improperly labeling workers as independent contractors when they are really employees undermines basic worker protections like minimum wages requirements, paid sick days and the overall safety of workplaces. Workers who are improperly classified also have no workers’ compensation protections if they are injured on the job; have not right to family leave; have no right to unemployment insurance; have no right to organize or join a union; and have no protections against employee retaliation.
One of ways to determine if an employee is improperly classified is if the employer directs the way in which the employee accomplishes their duties. If they do, it is likely the worker is an employee and not an independent contractor. Employment law is the basis for these protections that employees should be familiar with. These laws provide important protections for workers to help ensure they are properly classified and compensated for their work.