Misclassification of a Worker
The misclassification of a worker as an independent contractor instead of as an employee has both civil and criminal consequences in Minnesota as it is considered a form of wage theft. As mandates increase for employers regarding laws that impact their bottom line, it is tempting to start misclassifying workers as independent contractors. Resist the temptation. Not only is it unlawful, but the consequences could potentially destroy your entire business (and your personal life).
There are several myths regarding the classification of workers as independent contractors rather than employees. The following statements are myths:
- An employer determines if a worker is an independent contractor depending on the employer’s wishes.
- An employer can choose to classify a worker as an independent contractor if the worker requests such classification.
- An employer can classify a worker as an independent contractor to avoid the worker’s wages being garnished to satisfy a judgment.
- An employer can classify a worker as independent contractor so that the worker’s wages are not subject to automatic income withholding for child support or spousal maintenance obligations.
- An employer can classify a worker as an independent contractor to avoid having to pay for earned sick and safe time.
- An employer can classify a worker as an independent contractor to avoid having to pay and maintain worker’s compensation insurance.
- An employer can classify a worker as an independent contractor to avoid making certain the worker is eligible to work in the United States.
The government’s general position is that workers should be classified as employees and not as independent contractors. This position has held true regardless of the political party of the person in charge. If you are classifying a worker as an independent contractor, the burden is on you to show that the worker is not misclassified. More often than not, the law will not allow a worker to be classified as an independent contractor regardless of whether the employer and/or the worker wants the independent contractor classification. In order to meet your burden, at a minimum you will want to have a written independent contractor agreement. The independent contractor agreement must be carefully drafted, and take into account several different factors.
If the employer has control over the worker, and dictates where the worker works, when they work and how they work, the worker is going to deemed to be an employee rather than an independent contractor. In addition, if the worker only works exclusively for one employer that increasing the likelihood that the worker will be deemed to be an employee rather than an independent contractor.
Spangler and de Stefano, PLLP represents businesses regarding employment laws, including the classification of workers.
The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Spangler and de Stefano, PLLP and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.