The misclassification of employees as independent contractors only leads to confusion, potential abuse, and possible delays in benefits. These classifications exist to help employers, workers, and the state better understand exactly what the workers are doing and what benefits they may be eligible for should something happen to their work with a particular company. Misclassification is often the result of a mistake that, while annoying at the time, can be fixed rather easily. However, misclassification has been used to defraud workers and state government. The U.S. Department of Labor’s Wage and Hour Division is now cracking down on misclassification. It’s crucial that both employers and workers know who qualifies as what.
Benefit Eligibility Relies on Proper Classification
Employees are often eligible for specific benefits from employers, such as insurance, retirement plans, and overtime pay. If these employees become independent contractors, those benefits often go away (while employers may still offer these benefits to independent contractors, many don’t).
The concern with misclassification is that unscrupulous employers may be telling employees they’re really independent contractors in order to cheat the workers out of money and time. It’s easy to hide purposeful misclassification because many workplaces are now “fissured,” or divided in such a way that much of the work is farmed out to other companies even if the work is done in the original employer’s work location.
Florida and other states are taking steps to combat the problem by spelling out the exact conditions that describe employees versus independent contractors. Chapter 443 of the Florida Statutes has a list of conditions that have to be answered before a worker can be classified, including the method of payment (per time unit, like hourly or weekly, or per job) and the expectations of both parties regarding the relationship. In other words, an employer can’t give the worker the idea that they have an employer-employee relationship and then call the worker a contractor.