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Misclassified employees led to investigation in Florida

When a company utilizes independent contractors to carry out certain duties, that company often does not have many of the same financial responsibilities that companies with employees have, especially when it comes to certain taxes. As a result, some companies with independent contractors may have more expendable funds than other companies. However, misclassified employees could result in negative consequences.

An issue in Florida regarding the classification of workers has resulted in the Department of Labor and the Department of Revenue hoping to end the misclassification. It was reported that several construction companies would classify their workers as independent contractors in order to avoid certain taxes, such as payroll and unemployment taxes. As a result, the companies were able to place lower bids on work opportunities, which resulted in companies that properly classified their employees missing out on jobs.

Misclassification not only harms other companies, but the workers who are incorrectly considered independent contractors can also be negatively affected. These workers may not be compensated properly and face considerable issues if they are injured on the job. Some workers may not even be aware that they are classified as the wrong type of worker.

For individuals who suspect that they are misclassified employees, the correct classification could bring about considerable change in their compensation situation. Therefore, Florida workers may want to find out additional information on what constitutes the classification of independent contractor and that of employee. If parties believe that they should be considered employees, they may wish to take legal action to ensure that their classification is correct.

Source: Miami Herald, "Feds, Florida reach deal on construction industry rip-off", Nicholas Nehamas, Jan. 13, 2015

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