When interviewing for a new job, most workers will inquire about their starting salary, vacation time, and other perks such as the right to participate in a retirement plan or the availability of medical benefits. An equally important question that often goes unasked, however, is how a worker will be classified by their prospective employer. When classified as an independent contractor workers lose many of the protections afforded to employees. Many individuals who suffer a work-related injury file for Workers’ Compensation benefits only to find out too late that their employment status has been misclassified.
Unfortunately, the differences between independent contractors and employees can sometimes be difficult to discern. Independent contractors and employees often work side-by-side, perform similar tasks, and report to the same supervisor or manager. The manner in which assignments are received and completed can shed light on the true nature of the relationship between an employer and members of his or her workforce, however.
Independent contractors retain autonomy to accept or reject work at their leisure. They provide a good or service, usually while working within the constraints of an employment contract. They may choose their own hours, work from home, and handle a project or assignment in any way they see fit, as long as they deliver a finished product in accordance with the terms agreed upon by all parties at the time of hire. By contrast, employees are expected to comply with all requests by an employer. Their workflow is almost entirely dictated by a manager or supervisor, who also determines where and when work will be completed.
More often than not, the misclassification of an employee is a deliberate attempt on the part of the employer to cut costs. This is because an employer must pay Social Security, Medicare, Workers’ Compensation insurance, and unemployment taxes for each employee. Independent contractors receive none of these benefits.
When an employee becomes injured on the job they are frequently entitled to Workers’ Compensation benefits, which provides partial pay and continued medical benefits. Accordingly, the Workers’ Compensation can keep an injured employee financially afloat during their recovery. However, Workers’ Compensation benefits are unavailable to independent contractors. When an independent contractor sustains an injury in the course of performing the job duties they have no financial recourse. If they are unable to work, they will not be paid – regardless of the circumstances surrounding their workplace accident.
Because it is impossible to know if or when a worker will become injured, it is imperative that members of the workforce learn their classification status prior to sustaining an injury. Correcting a misclassification takes time and often requires intervention by the Internal Revenue Service, who will conduct an independent audit of the employer’s workforce to determine whether a classification is correct. While a potential misclassification is under review, the absence of Workers’ Compensation benefits can spell financial doom for an injured employee. An employer who attempts to skirt their financial obligations to their workforce can and should be held accountable, as soon as the misclassification is discovered.
If your efforts to correct a misclassification have been met with resistance by a supervisor or manager, the Philadelphia Workers’ Compensation lawyers of Gross & Kenny, LLP, can help. Contact us at 267-589-0090 or at 215-512-1500, or complete our online form to schedule a free initial consultation at our Philadelphia, Pennsylvania offices, where we assist clients who have been misclassified by their employer.