When employers wrongfully misclassify an employee as an independent contractor, that can hurt the worker in numerous ways.
By labeling employees as independent contractors, employers create the illusion of independence while stripping away crucial labor protections. It’s another way that dishonest employers can exploit their workforce and evade their legal obligations. While the consequences of misclassification are far-reaching, one of the most devastating outcomes is wage theft.
Misclassification denies a worker of minimum wage protections and overtime
One of the most blatant forms of wage theft arising from misclassification is the denial of minimum wage and overtime pay. Independent contractors are free to work for any wage they feel is fair – which means that employers can pay them less than minimum wage.
Overtime isn’t generally a consideration for these workers, no matter how long they work – not even if they work more than eight hours a day, every weekend and on holidays. They’re essentially at the mercy of unscrupulous employers who prioritize profit over fair compensation.
It also deprives workers of the additional on-the-job benefits they are due
Employee benefits, such as health insurance, retirement plans and paid leave, are typically not granted to independent contractors. Misclassified workers are left without essential protections and safety nets that a company’s employees enjoy.
When the perks of a job translate to real dollars, that takes money out of the misclassified workers This disparity also perpetuates income inequality and leaves workers without a safety net, making them vulnerable to financial hardship and medical emergencies.
Misclassified workers may also not be reimbursed for work-related expenses
When you’re an employee, your employer usually has to provide you with things like personal protective equipment (PPE), the tools for the job (including electronics) and other equipment – but independent contractors typically have to provide their own. Employers exploit misclassification by shifting the cost for these things onto their workers, further reducing the workers’ net pay.
The misclassification of employees as independent contractors is a grave issue. Sometimes, it’s done by mistake – and sometimes unscrupulous employers do it to deny workers their rightful wages, benefits and protections. If you’re a victim of employee misclassification, it may take seeking legal assistance to help you assert your rights.