Why is it a problem when your employer misclassifies you?

There are many different ways that an employer can classify someone who works for them. Someone may be a part-time or full-time employee or perhaps an independent contractor.

Your employer’s classification may initially seem unimportant to you. However, it might matter when you pay your taxes or get hurt or sick and require medical attention.

Why might an employer misclassify you?

An employer may be motivated to misclassify their employees for many reasons. One major reason is to avoid having to provide you with health insurance. Most employers must do so under the Affordable Care Act (ACA) if they have 50 or more full-time employees.

Another reason why employers misclassify workers as independent contractors is so they don’t have to take deductions from their workers’ checks for Social Security or Medicaid. Employers who classify their workers as independent contractors avoid offering paid time off, making retirement plan contributions and paying for workers’ compensation insurance to cover them.

What should you do if your employer misclassified you?

Employers who misclassify employees may have to pay back taxes and fines. They may also have to pay any unpaid wages and benefits that an employee should have received.

Incidents in which employers misclassify workers don’t happen all the time, but employees are the ones who lose when they do. If you notice that your employer hasn’t taken any deductions on your paycheck, then you’re likely classified as an independent contractor. If you believe that you might have a misclassification issue on your hands, you should learn more about filing a claim to seek the money and benefits owed to you.