It is a major labor offense to misclassify your employees, but the good news is that you can negotiate to reduce any fines or penalties that could be assessed. You may also be able to take steps to keep your workers classified as you intended, which can help your business in the long-term
As a business owner, it is your responsibility to classify your employees or contractors appropriately. If you have independent contractors working for you, you do need to be cautious about how you treat them. While you do gain the benefit of not paying for their employment taxes or providing them with other benefits employees would receive, if you end up treating them the same as employees (or requiring them to work in the same way as employees), then you could end up having to cover past taxes and benefits in the future.
Why is it so difficult to classify employees correctly?
Part of the problem is that there is a gray area between an independent contractor and traditional employee. For example, a traditional employee may be expected to be at work from 8 a.m. to 5 p.m. each day and to wear a certain uniform. Depending on the job, it might be part of the job for an independent contractor to be available during those hours and to have a certain kind of attire as well.
Since there are contracts involved with both kinds of workers, it’s a good idea to have your attorney look over the one you want to use before you have a contractor or employee sign. If they believe that your workers are being misclassified, then they can help you change the terms of the contract appropriately.
