How Does Employee Classification Play a Role In Wage and Hour Disputes?
Employees in various workplaces are classified in a manner that dictates how they may be paid and the benefits to which they are entitled. For some, this could mean the individual is an employee of the company. For others, though, they may be classified as independent contractors.
Some employers misclassify individuals. The decision to misclassify a worker is typically based on wages and the employer’s unwillingness to pay certain amounts or benefits to the employee. If the employee is misclassified, they may have the right to pursue legal action.
Common Types of Misclassification
Some of the most common types of misclassifications involve part-time, temporary, substitute, probationary, and casual labor workers. These workers are considered employees, but some companies fail to report the wages received by them and they may be typically paid in cash.
Misclassified workers may face these problems:
- Ineligibility to receive payments such as workers’ compensation or unemployment
- Ineligibility to receive certain benefits such as overtime, health and labor protections, minimum wage, and family and medical leave
- Ineligibility to receive health insurance
- Ineligibility to receive full Social Security taxes
Employers may misclassify employees for a number of reasons, including the following:
- They can avoid paying income, unemployment, and FICA taxes, as well as workers’ compensation premiums.
- They can create a competitive advantage that would be unfair to some workers.
- They can try and convince certain workers to join their company over another employer who does not misclassify employees.
When misclassification impacts the employee and costs them specific wages and benefits, the employer should be held fully accountable for their actions.
At Fieger Law, our Michigan employment law attorneys work hard to help you get the compensation you need and have earned. Trust that we’ll go the extra mile to help you accomplish the most favorable outcome possible.