Misclassification means that one class or subclass of workers is treated as another one. It happens mostly when employers try to cut costs by all means, including paying less to their employees whenever it’s possible. As a result employees don’t get the benefits they are entitled to.
One of the most common types of misclassification is treating workers as independent contractors and not as employees. The line between employees and independent contractors can be quite subtle and it is not easy to distinguish between the two.
However, the major difference between employees and independent contractors is that employees basically sell their ability to work to their employer. Thus employees have to work certain hours a day or a week for their employer and obey their employer’s orders. On the other hand, employees enjoy many benefits that come along with their employee status. Such benefits include salary, Social Security, health insurance, workers’ compensation insurance, pension plan, sick leave etc.
Independent contractors, on the contrary, are considered to be their own bosses. They work for themselves. They don’t have any daily or weekly schedule established for them by somebody else and they don’t have to obey anybody’s commands. On the other hand, they enjoy neither salary, nor other traditional employee benefits.
Business related expenses are also treated differently alone the line dividing employees and independent contractors. Employees’ business expenses are paid or compensated by their employer. Independent contractors pay for everything related to their business out of their pocket.
That is why if a worker is treated as an employee, but has a status of an independent contractor, it would be a case of misclassification. If it happens to you, you should contact your employment attorney. You may be deprived of many benefits and certain payments in violation of law.
Another typical misclassification is when non-exempt employees are classified as exempt. Most employees are non-exempt. It means that they are entitled to have a minimum wage, 40 hours regular pay workweek and one and a half times rate of any overtime after 40 hours a week. Exempt employees, like for instance, managers, part-time babysitters, home companions and others, are not covered by these rules.
It is tempting to rename some positions to look like “exempt” and make their employees to work overtime for free. For instance, to have a position of “assistant manager” instead of “cashier” and a position of “shift supervisor” instead of “sales associate” and classify them accordingly as “exempt.” This way some employers may try to make their employees working overtime without adequate pay.
There are other types of misclassification in employment relationships. If you think that you are misclassified and suffer losses because of that don’t hesitate to contact your employment attorney to discuss the issue.