Misclassification of Employees
Employee misclassification is a huge issue in today’s workforce. It involved companies attempting to classify workers as independent contractors when they should really be classified as employees. Classifying workers as independent contractors is advantageous to the employer since independent contractors do not receive health insurance, time off, and retirement benefits that employees receive.
In order to determine whether or not you are being misclassified, you must understand the differences between employees and independent contractors.
When You Can Legally Be Qualified As An Independent Contractor
In order to be legally classified as an independent contractor, the relationship you maintain with the employing company must meet the following criteria:
- The employer may only control the finished product of your work. As an independent contractor, you are expected to be fully qualified for the job duties before you begin work. It is illegal for employers to train you if you are not an employee. For example, if a marketing company hires a graphic designer as an independent contractor, they cannot train that graphic designer or dictate the way the graphic designer goes about the creation of the image they have commissioned.
- An independent contractor must be able to work for multiple businesses at the same time. If you are beholden to one company, you are likely being misclassified.
- The services provided by the independent contractor may not be related to the core of the company’s business. For example, a used car salesman may hire an independent contractor to manage his human resources department since human resources are not a core part of his car selling business.
- As an independent contractor, you must be able to manage your own business relationships and finances.
What To Do If You Believe You Are Being Misclassified
If you believe you are being illegally misclassified as an independent contractor, there are several things you can do:
- Gather evidence to support your claim. Write up the ways in which you believe the work you are doing necessitates classification as an employee vs. an independent contractor.
- Discuss your reasoning with your employer. In many cases, employers will be willing to hire you on as an employee.
- Ask the IRS to review your case. The IRS will speak to both you and your employer in order to make a determination about misclassification.
- Speak to an employment attorney about your situation. It is always best to have legal representation ready in case your situation escalates.
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