If your employer misclassifies you as an independent contractor, you will lose certain job benefits and legal protections offered to employees. For instance, you will not be eligible for workers’ compensation benefits and will have to pay the full amount of Social Security taxes out-of-pocket.
You will also lose the right to a minimum wage, overtime or sick pay and even rest breaks. These rights are legally protected if you are an employee, not an independent contractor.
Why does this happen?
Employee misclassification happens for several reasons. It may be due to poor HR policies in your workplace or a deliberate attempt by your employer to save on costs by circumventing the law. Either way, you are bound to lose when misclassified as an independent contractor, and you should take appropriate action.
What can you do about it?
You may be wrongly classified as an independent contractor if your employer has significant financial and behavioral control over your working relationship. You may also be doing similar work as other employees but are considered an independent contractor.
Picking it up with your employer by following the necessary channels in your workplace is an excellent place to start. Write to your employer or human resources department to seek further clarification on your status and explain why you think you are wrongly classified.
Protect your legal rights and financial interests
If your case is not resolved satisfactorily, you can explore other legal options available to get justice. For instance, you can bring legal action against your employer, where you may be entitled to damages, and rope in the IRS to recover due taxes.
That said, consider seeking an informed assessment of your case before taking any action, as it will help you respond accordingly in light of the prevailing circumstances.