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Is misclassifying workers illegal?

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Employees who do not run their own business expect a few basic things: fair pay, benefits, and fair treatment from their employer. However, the extent to which an employer must provide these things can depend on your status as an employee or contractor.

The National Labor Relations Board (NLRB) issued a ruling in August 2019 that an employer does not violate the National Labor Relations Act by misclassifying their employees as contractors. This is a notable ruling from the NLRB because it could affect how employers treat workers in the future.

Why your classification status matters

Sometimes misclassification of an employee as a contractor is an innocent mistake. While mistakes happen, there are benefits for an employer to deliberately misclassify an employee including:

  • How employees are compensated.
  • What benefits are available to employees, if any.
  • Fewer legal obligations to employees if they are classified as contractors.
  • The potential for tax breaks by classifying employees as contractors instead of as employees.

You can see that your classification as an employee matters a great deal to your employer and should matter as much, if not more, to you.

Are you misclassified?

Someone who is not well-versed in labor law may not be able to determine whether they are properly classified. Thankfully, the Department of Labor has identified several factors the Supreme Court uses in misclassification cases. Some of these factors include, but are not limited to the permanence of your working relationship; how important your work is to your employer’s business; and how much control you have over your work.

It is important to fight for your classification because you may not be receiving the compensation or the vacation and health benefits that you are entitled to as an employee rather than a contractor. Just because the NLRB says an employer does not violate the law by misclassifying employees does not mean you should forego the compensation and benefits that you deserve.

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