Employers have a large bag of tricks they can use to avoid paying prevailing wages, the minimum wage, proper overtime, payroll taxes and other legally mandated costs. One of the most common tricks is to classify a person as an independent contractor when the reality of their circumstances shows that they are an employee. While employers do not actually have the right to define workers as they see fit, regulators face an uphill battle in catching and punishing them for misclassification.
It is illegal to knowingly hire an immigrant who is in the United States illegally. One way employers get around this obstacle is by classifying workers as independent contractors. By simply defining a worker this way, the employer relieves itself of the burden of actually checking on the worker’s immigration status. While this might strike you as a harmless, or even beneficial practice for the worker, it goes beyond merely dodging U.S. immigration laws.
In many cases, workers who come here from other countries are classified as independent contractors so they can be abused and cheated. The construction industry is one that has been hard hit by misclassification. Misclassification has allowed countless employers to steal money from taxpayers and cheat hard-working people of the wages they have earned. Workers are often forced to rely on Medicaid, food stamps and other government services to get by. The costs of misclassification are not just borne by vulnerable workers.
You are not an independent contractor just because an employer says you are. Misclassification allows unscrupulous employers to trample on the rights of workers and take tax dollars from the state and federal government. Misclassification often leads to dangerous working conditions, substandard work and other problems for workers and customers. More needs to be done to force employers to properly classify their workforce and take responsibility, as the law intends.
Source: McClatchy DC, “Immigrants are most susceptible to worker misclassification” by Franco Ordoñez and Mandy Locke , 4 September 2014