Can I sue my employer for misclassification?
If you discover your employer misclassified you as an independent contractor, California employment laws provide recourse. California employment laws allow you to bring suit against your employer for the following: Unpaid overtime and minimum wage, Willful misclassification of employment status.
What is the penalty for misclassification of employee?
between $5,000 and $15,000 per
The California Misclassification Penalty The penalty can range between $5,000 and $15,000 per violation – and if an employer has been proven to engage in a pattern of willful misclassification, the courts can fine them an additional $10,000 to $25,000.
How do I report an employer for misclassification of employees?
If employee misclassification is causing tax fraud, workers can anonymously report their employers to the IRS by filing Form 3949-A. If workers would like the IRS to make a determination about their worker status, they can file the non-anonymous Form SS-8.
Is misclassification of employees illegal?
An employer in California cannot retaliate against an employee for exercising their rights under California labor laws. Any retaliation for filing a wage and hour claim or reporting willful misclassification of an independent contractor is against the law.
How much can I sue for misclassification?
Get Damages and Up to $25,000 Per Violation under California Misclassification Law. Our attorneys can help you file a lawsuit to recover damages and penalties for being misclassified as an independent contractor.
What specific benefits would an employer gain by such misclassification?
Employee misclassification is the practice of labeling workers as independent contractors, rather than employees. The practice allows employers to avoid paying unemployment and other taxes on workers, and from covering them on workers compensation and unemployment insurance.
How do I know if I’ve been misclassified as an independent contractor?
Contractors typically use their own work equipment such as laptops and cell phones. If the company issues their own computer or cell phone or if you have a company email address or business card, those may all be telltale signs that you are being misclassified as a contractor.
What are the penalties for misclassification of independent contractors?
Under Labor Code section 226.8, which prohibits the willful misclassification of individuals as independent contractors, there are civil penalties of between $5,000 and $25,000 per violation. Willful misclassification is defined as voluntarily and knowingly misclassifying an employee as an independent contractor.
What happens if an employee is misclassified?
When an employee is misclassified, federal and local government lose out on tax and payroll revenue. Companies can be held responsible for paying back-taxes and interest on employee’s wages as well as FICA taxes that weren’t withheld originally. Failure to make these payments can result in additional fines.
What happens if an employee is misclassified as exempt?
Misclassifying employees as exempt from overtime can result in back overtime, fines, and damages. Before classifying employees as exempt, make sure they satisfy applicable federal and state tests. When in doubt, it is best to err on the side of caution and classify employees as non-exempt.
What are two things that can happen if there is a misclassification of a worker?
The consequences of misclassification can be grave. Besides owing back taxes to the feds, the business will also owe state unemployment taxes and unpaid worker’s compensation premiums, and may owe unpaid overtime or minimum wages, medical expenses and unpaid vacation and sick pay.