As an employer, you want your workers to do their jobs without anything bad happening. You may carry workers’ compensation insurance or self-insure, but you want to avoid injuries in the first place. Unfortunately, workplace accidents can happen despite your best safety efforts and could leave someone injured badly enough that they can’t get back to work.
If someone gets hurt while working for your company, they may hope to claim workers’ compensation benefits. If you currently have that worker classified as an independent contractor, they might attempt to fight their classification in order to get benefits.
You will have to think carefully about how to defend your company from such allegations made by a contractor desperate for benefits that their employment arrangement did not secure for them.
The problem with ignoring misclassification claims
Especially if the worker who got hurt has a history of working for your company without issue, you may feel bad that you can’t give them the benefits they want. You might even consider letting them make a claim of misclassification so that they can get benefits, even though there might be a financial penalty for your company.
It’s important to realize that subrogated expenses and claims from workers’ compensation won’t be the only potential consequence of allowing a misclassification allegation to go unchallenged. Your company could face significant issues, including allegations of tax fraud and underpayment because employee classification also affects what taxes your company pays. You could wind up with legal and financial consequences that persist for years if you don’t push back.
Defending against invalid workers’ compensation claims and claims of employee misclassification helps protect your company’s reputation and its financial solvency. Find out how an experienced attorney can help.