Whether we are advocating the rights of an employee or defending an employer, we are more and more frequently faced with the question of whether an employee who is being treated as an independent contractor instead of an employee has been misclassified by the employer.
Does this really matter? Yes, and in more ways than one.
If an employer has mischaracterized an employee as an independent contractor, the employer has likely underpaid the amount of employment taxes on that individual and improperly shifted this burden onto the employee. Additionally, independent contractors are not entitled to overtime pay. Thus an employee who has been mischaracterized may be entitled to a hefty award of back pay and liquidated damages for a period up to 3 years if the violation is found to be willful. In some cases, a misclassification which results in an unpaid overtime case can ruin a small business.
If you believe that you may have been mischaracterized yourself or if you are an employer that has questions about this issue, we encourage you to seek the counsel of Wilson McCoy, P.A.