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An overview of employee misclassification

On Behalf of | Sep 4, 2019 | Wage & Hour Laws |

It is not uncommon for a company or employer to misclassify the people who work for them. This is most often done so by mistake, but there are times when a company might misclassify an employee on purpose. When an employee is misclassified, he or she misses out on benefits and the opportunity for overtime pay. Other benefits misclassified employees might miss include minimum wage pay, unemployment benefits, medical and family leave and more.

The most common occurrence where misclassification occurs is when a company brings on someone as a contractor instead of an employee. Misclassification of a contractor means that the person is not an employee of the company. He or she is a subcontractor. They are not eligible for any type of benefits from the company no matter how many hours they work for them per week.

It’s also common for companies to misclassify employees as part-time instead of full-time in an effort to reduce the amount of overtime fees paid and benefits issued to their employees. The company will then ask the employee to work 39 or fewer hours per week, which is just under the full-time range, in order to avoid paying overtime.

When someone is misclassified by a company, the federal government also loses out on taxes. Taxes are handled differently for contractors and employees, so when misclassification occurs, the government will lose the tax money it should receive if the employee had been classified correctly.

Misclassified employees are at a major disadvantage for many reasons. If you believe you were misclassified when hired by a company, be sure to examine the situation and document all of your evidence. You can fight the misclassification with the help of a wage and hour law attorney.

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