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What happens if an injured contractor claims misclassification?

Employers often have complex relationships with their workers. Long gone are the days where workers wanted to consistently put in 40 hours a week in one workplace or retire from the place where they got their first job.

More professionals seek short-term or part-time work and may work for multiple companies simultaneously. Sometimes these workers have independent contractor status instead of employee status at the companies where they work.

Unfortunately, if someone classified as an independent contractor gets hurt on the job, they typically cannot file a request for workers’ compensation benefits. That might mean they try to claim misclassification because they need financial support.

What penalties could you face from the state?

While you may feel like you have always maintained an appropriate contractor relationship with the worker in question, it’s possible that the state of New York won’t agree with your perspective. If they determine that you misclassified an employee, that person can then seek workers’ compensation benefits, and you as an employer can face some serious consequences.

In New York, misclassification is a form of misrepresentation, which can result in big fines for a company. The state could fine the company as much as $2,000 for every 10 days of non-compliance or as much as twice the cost of the worker’s compensation claim. If the state pursues criminal charges, a conviction could mean additional fines of as much as $50,000.

Although it can seem unkind to the worker involved, you may need to strongly consider defending against a misclassification claim because it will affect your company financially and could lead to legal charges.