It doesn’t matter if you’re going through the interview process or already established as an employee, you must pay close attention to how your employer classifies you.
For example, if your employer tells you that they want to classify you as an independent contractor after many years as an employee, you shouldn’t go along with it (unless you’re okay with the impact). This will alter your employment in a variety of ways, many of which can affect your financial situation.
Here are some of the primary concerns associated with misclassification:
- No longer eligible for benefits: As a contractor, your employer can take away your benefits, leaving you to pay for your own health insurance and open your own retirement account.
- Ineligible for unemployment insurance: As an employee, if you lose your job you can file for unemployment. But as a contractor, you’re not eligible, which puts a lot of pressure on you should the company decide they no longer require your services.
- No longer eligible for family and medical leave: Maybe you’re having a baby and want to take family and medical leave, so you have more time to recover. As an employee, this benefit may be available to you. But as a contractor, you’re ineligible to request leave.
If you have questions or concerns about your employer misclassifying you as a contractor, talk to the human resources department. There are strict rules in place that govern how a company classifies its workers.
Should your employer continue to violate your rights, you can file a complaint with the U.S. Department of Labor and the IRS.
