What is Job Misclassification?
When “employees” are misclassified as independent contractors, instead of employees, no one wins. Workers who are independent contractors are not entitled to unemployment benefits, medical insurance, social security, FMLA or vacation, workers’ compensation and other important benefits. In addition, in some industries like construction, employers pay workers cash wages “under the table” – allowing them to avoid their legal obligations like minimum wage, overtime, prevailing wage, and more.
During hard economic times, like the pandemic, these independent contractors may find themselves needing government assistance, with taxpayers on the hook.
When workers are misclassified, workers lose pay, federal and state governments lose revenue, and law-abiding employers who fairly treat their workers as employees are at a cost disadvantage relative to employers who cheat by misclassifying workers.