HOW WORKER MISCLASSIFICATION HARMS YOU
Worker misclassification happens when employers improperly classify workers as “independent contractors” instead of “employees.”
Worker misclassification is illegal because it deprives you of your employment rights and protections.
If you are misclassified as an independent contractor:
- you won’t get overtime pay when you work more than 40 hours a week;
- your injuries on the job may not be covered by workers’ compensation;
- you might not get unemployment if you lose your job; and
- you will be responsible for paying any income tax withholdings, social security and medicare taxes due quarterly.
You may also miss out on employer-provided health insurance, retirement plans, vacation and sick leave, or other employee benefits typically offered in the workplace.
There is more general information available on DWD’s website at https://dwd.wisconsin.gov/worker_classification/.
FREQUENTLY ASKED QUESTIONS
What is Worker Misclassification?
It is when employers treat workers as independent contractors when by law they are employees. In doing so, they illegally avoid workers’ compensation insurance, unemployment coverage, or other employer paid taxes and withholdings.
Who is an “employee” under Wisconsin law?
If you are performing services for a business or individual and they control the work to be done and how it will be done, you are very likely an employee. Employees fill out a W-4 form when hired, have taxes withheld from their paycheck, and receive a W-2 form at the end of the year.
Who is an “independent contractor”?
“Independent contractors” are in business for themselves, with an independent trade, business or profession offered to the public. Independent contractors retain the right to control how they will do the work and have the risk of losing money even though services have been performed.
What if I have a contract that says I am an independent contractor?
You may still be considered an employee if the employer retains the right to control what will be done and how it will be done.
How do I find out whether I should be an employee or an independent contractor?
Call the Wisconsin Department of Workforce Development at (608) 261-6700 or Construction Business Group at (608) 240-4170. There is also information available on DWD’s website at http://dwd.wisconsin.gov/ui201/t2201.htm.
What if I’m paid cash, “under the table”, or “off the books”?
You still must make payments to the IRS and Wisconsin Department of Revenue for income taxes, and to the IRS for FICA. If you don’t, you face potentially large fines and penalties and possible criminal penalties.
How can I protect my rights?
You can file a claim for wages owed and potentially be entitled to additional damages and costs. Contact CBG at (608) 240-4170 or firstname.lastname@example.org. An employer is barred from retaliating against anyone seeking to protect their rights.