Employers May Misclassify Employees to Avoid Paying Workers’ Compensation

worried_workerMany workers are shocked to discover they can't be compensated for an injury at work because they're not technically employees. Whether it's done intentionally or not, misclassifying employees is a common way employers stop injured workers from getting benefits, forcing them to pay for their medical bills.

Reasons Employers May Misclassify Employees as Independent Contractors

There are two recognized categories of workers under U.S. labor laws: employees and independent contractors.

These two categories have strict requirements so workers and employers can clearly understand the nature of their employment.

Unfortunately, many employers will classify workers as independent contractors because contractors are exempt from many provisions in the Fair Labor Standards Act (FLSA), such as:

  • Minimum wage and overtime laws. Contractors are exempt from earning overtime and don't have to be paid the highest applicable minimum wage.
  • Benefits. Not only are independent contractors ineligible for state workers’ compensation benefits, they're usually not eligible for employer-sponsored health benefits or vacation and sick leave plans.
  • Discrimination. Independent contractors cannot file claims with the Equal Employment Opportunity Commission (EEOC), which investigates claims of employment discrimination based on race, gender, age, or disability.

How to Take Action Against an Employer for Misclassification

An employer can face serious consequences for employee misclassification. The most common way workers can correct the misclassification is to get the IRS involved.

Employers who rely heavily on contractors don't have to pay taxes for these workers, and employers who misclassify workers to avoid paying state and federal taxes can face fines and jail time, in addition to being ordered to provide benefits to misclassified employees.

If your employer failed to provide you with workers' compensation benefits because of your employment status, we can investigate the details of your claim. Contact Johnson & Gilbert, P.A. today by filling out the brief contact form on this page to tell us more about your situation.

 

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