It's difficult to appreciate the downside of misclassification until you experience it. In this video, learn about a story that brings this exposure to full light.
Most employers who hire independent contractors…don't think about the downside…of a misclassification problem until it's too late.…Let's walk through a scenario.…Assume one of the misclassified drivers…causes an automobile accident…while doing work for your company.…Assume that because of this accident,…he or she is disabled and unable to go back to work.…Also assume people in the other car were seriously injured.…
Under this scenario, the company will be sued…for the negligence of the independent contractor…based on what is known as respondeat superior liability.…It'll be argued that the company…in fact controlled their work…and that the independent contractor status…was a subterfuge to avoid liability.…Since the employee is now unemployable,…the inevitable unemployment and worker's compensation claims…are likely to follow claiming the individual…should have been classified as an employee.…
If the independent contractor is found to be an employee…and the company does not have worker's compensation coverage…then it's exposed to payments…
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- Legal requirements for classifying independent contractors
- Financial and strategic benefits of contract employees
- Downsides of misclassification
- What triggers complaints and investigations?
- Licensing statutes, permit requirements, and anti-discrimination statutes
- Preventing misclassification claims
- Considering an SS-8 ruling
- Amnesty programs