Let’s start with some basics. Although there are many tests for determining whether a worker is an employee, the most common types of tests are Right to Control Tests.
These tests seek to determine who has the right to control the means and manner by which work is performed. If the company has more control, the worker is generally an employee. If the worker has more control, the worker is more likely an independent contractor. That’s an overstatement, but it captures the gist of the issue.
With a finding of worker misclassification, the workers you thought were not your employees are suddenly deemed your employees. What does that mean practically? It means that you have not been complying with all of the laws that apply to employees.
Once upon a time, it was easy for companies to know who their employees were. Not so much anymore.
With the rise of the gig economy and other creative workforce arrangements, the lines between employee and non-employee have blurred.
Companies often prefer the flexibility of retaining non-employee workers. These relationships come in many varieties — independent contractors, consultants, staffing agency workers, outsourced vendors, etc. Many workers prefer these flexible relationships too. But a growing chorus of government agencies and class action plaintiffs have begun to cry foul. Continue reading
Who Is My Employee? 