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What New York employers should know about misclassifying employees

Some employers in New York have misclassified their employees. Unfortunately, this can have severe repercussions.

Some of the information regarding employee misclassification employers should be aware of is found here.

How does employee misclassification happen?

Employee misclassification occurs when an employer wrongly classifies an employee as an independent contractor. This misclassification can lead to various legal and financial consequences for the employer, including wage and hour violations, tax liability, and legal penalties.

Is it illegal to misclassify employees?

New York has strict laws regarding employee misclassification. Employers who misclassify employees can face significant fines and penalties, including back wages, interest, and liquidated damages. Additionally, employers may be subject to criminal prosecution for willful misclassification.

The New York State Department of Labor (NYSDOL) has a task force to combat employee misclassification. This task force investigates misclassification complaints and works with other state and federal agencies to enforce labor laws.

How to determine the proper classification for an employee

Employers should know the factors determining whether a worker is an employee or an independent contractor. These factors include the degree of control the employer has over the worker’s work, the worker’s opportunity for profit or loss, and the extent to which the worker is integrated into the employer’s business.

Employers should carefully review their policies and practices to ensure compliance with New York labor laws. This includes maintaining accurate records of hours worked, paying workers by state and federal minimum wage and overtime laws, and classifying workers as employees or independent contractors.

Employers who are uncertain whether a worker should be classified as an employee, or an independent contractor should seek guidance when doing this. Knowing the legal requirements and potential risks associated with employee misclassification can help employers avoid issues.


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