Employers classify their workers into two classes – employees or independent contractors. There are a lot of legal differences between an employee and an independent contractor.
Sometimes, an employer may misclassify workers for various reasons. The main one is to cut costs. Independent contractors do not come with associated costs like wages, taxes, or benefits, which is good news for employers.
Some of the employee-related expenses your employer is looking to avoid include:
- Overtime pay
- Minimum wages
- Social Security taxes
- Workers’ compensation insurance
- Withholding income tax
Employee misclassification is against the law, and you need to take action if you think your employer has misclassified you.
If your employer has misclassified you as an independent contractor yet you are an employee, you will be the one losing out in the end. Independent contractors don’t have the same protections as regular employees. For instance, you are not protected by overtime or minimum wage laws, which means that you could be getting underpaid.
How can you tell you have been misclassified?
Various myths exist, and as a result, many employees are not even aware that they have been misclassified as independent contractors. It is only when something happens, like a workplace accident, and you claim benefits only to be denied because you are not employed. By then, it is usually too late to do anything about it.
Therefore, it is advisable to ascertain and establish the facts early enough, to avoid such an instance. Remember, you may be entitled to back pay or missed benefits for the period your employer has misclassified you as an independent contractor. Knowing the steps to take is crucial in helping you safeguard your rights and get justice.