Misclassified Employee? Here is what you need to do

Classifying employees as “independent contractors” can benefit an employer in several ways, but the same cannot be said for the employee in question. If you have reasons to believe that your employer has misclassified you as an independent contractor, lawyer Ravi Sattiraju can advise you regarding the best course of legal action that you can take. Being misclassified can be costly. Among other things, it means you will:

  • Not qualify for workers’ compensation benefits, and your employer won’t be entitled to pay for your workers’ compensation insurance
  • Not be entitled to unemployment benefits and your employer won’t be required to pay your unemployment insurance
  • Need to pay your entire Medicare and Social Security taxes out of pocket – employers are obliged to pay half of these taxes, but only for employees and not independent contractors
  • Not have any workplace rights that employees have like overtime pay, minimum wage, rest breaks, and sick pay
  • Not qualify for the Obamacare healthcare coverage

An employer doesn’t have to offer many basics to an independent contractor that employees take for granted. Meaning, the employer benefits a whole lot when they classify you as a contractor than an employee. Unfortunately, and under many circumstances, you could be classified as a contractor, yet you qualify to be an employee. A United States Department of Labor 2000 study revealed that 10 to 30% of employers misclassify employees as independent contractors.

The question now becomes, is there anything you can do if your employer misclassifies you?

Yes, you can do many things, and get incredible results. For instance, you can:

Talk to your employer

The first thing that you should do is to talk to your employer and air out all your concerns about being misclassified as an independent contractor or consultant. A good employer may assess your classification and reclassify you appropriately or give you reasons why they think you are a contractor, and not an employee.

Involve IRS

If your meeting with the employer didn’t yield any fruits, your next step should be to get in touch with the Internal Revenue Service (IRS). You can request them to establish whether you are an independent contractor or an employee for federal reasons. You’ll have to fill out Form SS-8, which requires details like your reasons for filing the form, the total number of workers performing the same service as you, how you obtained the job, past or present litigation concerning your status, work status and how your employer treats you at work. IRS will do some fact checking and determine your employment status for federal income and employment tax withholding.

File an unemployment insurance case

If you’ve been terminated, you can file an unemployment insurance lawsuit with New Jersey’s unemployment agency. Be sure to list that you have been classified as a contractor rather than an employee, and the agency will look into it. If it proves otherwise, you will be eligible for unemployment insurance and your employer will need to pay the insurance premiums.

Call a lawyer

This is the best thing that you can do – a lawyer has experience with misclassification cases and will help lift the burden off your shoulders. They will handle everything for – from uncovering your employment status to making sure your employer compensates you for any damages.



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