What if employer misclassified as an independent contractor?

California law also permits employees to recover civil penalties (like a fine) from employers who misclassify employees as independent contractors. California Labor Code Section 226.8 provides for civil penalties ranging from $5,000 to $15,000 per violation.

What happens if an employee is misclassified?

When an employee is misclassified, federal and local government lose out on tax and payroll revenue. Companies can be held responsible for paying back-taxes and interest on employee’s wages as well as FICA taxes that weren’t withheld originally. Failure to make these payments can result in additional fines.

How much can I sue for misclassification?

Get Damages and Up to $25,000 Per Violation under California Misclassification Law. Our attorneys can help you file a lawsuit to recover damages and penalties for being misclassified as an independent contractor.

How do you report employer misclassification?

If employee misclassification is causing tax fraud, workers can anonymously report their employers to the IRS by filing Form 3949-A. If workers would like the IRS to make a determination about their worker status, they can file the non-anonymous Form SS-8.

How do you fire an independent contractor?

If your independent contractor agreement contains a provision that allows the parties to terminate the relationship at any time, revise the agreement to include a notice provision with at least some kind of a notice period required for termination of the contract.

What is the primary factor that precludes an employer from classifying an agent as an independent contractor?

What is the primary factor that precludes an employer from classifying an agent as an independent contractor? The employer has the right to control the agent’s work.

What happens if you are misclassified as an independent contractor?

Being misclassified as an independent contractor instead of an employee for legal and tax purposes can be very costly. Among other things, it means that you’ll: have to pay all your Social Security and Medicare taxes out of your own pocket (employers must pay half of these taxes for employees, but not independent contractors

Why do employers classify employees as independent contractors?

Employers can save a lot of money by classifying workers as independent contractors instead of employees. That’s why many of them do so, even if the workers involved should really be treated as employees under the law.

What to do if my employer classifies me as a contractor?

First, you can try to talk to your employer to see if it will review your classification and reclassify you as an employee. Explain that you think you’ve been wrongly classified as an independent contractor. At the very least, you should get an explanation as to why they think you are a contractor, instead of an employee. Get the IRS Involved.

What can I do if my employer misclassifies me as an employee?

First, you can try to talk to your employer to see if it will review your classification and reclassify you as an employee. Explain that you think you’ve been wrongly classified as an independent contractor. At the very least, you should get an explanation as to why they think you are a contractor, instead of an employee.