One of the most common forms of employer fraud comes from misclassified workers. Some unscrupulous companies decide to list workers as independent contractors, which can alter a variety of conditions and skirt some of the commonly practiced laws. If it is not resolved, it can create a slew of problems for the employee. For help with a complex litigation matter regarding misclassification, an employee should speak to a lawyer.
Independent contractors do not receive many benefits and protections compared to regular employees, such as minimum wage, overtime compensation, mandated leaves, unemployment insurance, Workers’ Compensation benefits, and safety laws. It can mean more taxes paid, including Medicare and Social Security, that would normally be shared by employers. Oftentimes the inconsistent pay means employers can pay less in wages and taxes; this actually hurts the overall workplace. Even if the worker in question is a self-owner, this can be used to avoid responsibilities and legal obligations.
There are some major questions to answer if someone should be considered an independent contractor. Some considerations include:
- Control of the work: The more training, supervision, and guidance provided by the employer, the more likely the worker should be considered a standard employee. This is the most basic criteria.
- Financial control: Employment conditions can rely on who is responsible for the initial investment, paying expenses, payouts, and any limits on profits. Whichever side harbors more responsibility usually determines if someone qualifies as an independent contractor. Employers often control schedules, including time off, the length of working together, and how vital the employee’s work is to the business. If a worker has little say in this matter, it makes it hard for the employer to argue that the individual is a true independent contractor.
What can an Employee Do to Resolve Misclassification?
If a worker has concerns about misclassification, it is best to go to the employer right away. They have an obligation to answer questions truthfully and thoroughly. If unsatisfied, take the case to authorities. The Internal Revenue Service (IRS) allows employees to file a form to officially determine worker classification. Usually, the IRS will get involved because it wants to know what businesses may be hiding from the tax authorities. However, this does carry the possibility of disclosure of the employee’s identity, which can lead to retaliation.
It is important to file all necessary forms. For taxes, Form 8919 will resolve any discrepancies regarding paid or unpaid Social Security or Medicare obligations not met by the employer. Filing for unemployment will spur the state to examine the relationship and see if the employee is misclassified.
Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Help Misclassified Workers
Challenging an employment classification can be confusing. It can also mean the difference between thousands of unpaid wages or overpaid taxes. Having a lawyer on your side will make a difference. Our Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C. know what to do to help your case. Call us today at 215-574-0600 or contact us online for an initial consultation. Based in Philadelphia, we are pleased to serve clients throughout Pennsylvania and New Jersey.