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How can employee misclassification hurt Georgia workers?

| May 18, 2021 | Wage & Hour Laws

The term employee misclassification refers to employers in the Atlanta area, or elsewhere, improperly labelling workers as independent contractors and treating them as such.

Even if they initially go along with it because they need the income, employee misclassification can hurt Georgia workers in a number of ways.

Independent contractors will not receive protection of the Fair Labor Standard Act or other important state and federal wage and hour laws.

In other words, a company can pay their independent contractor an agreed price for work, even if it is far below what is required by minimum wage and overtime laws.

Furthermore, independent contractors do not usually get the protection of workers’ compensation or unemployment benefits.

Indirectly, a misclassified employee may suffer the burden of being saddled with extra tax debt. Unlike employees, an independent contractor will have to pay the entire cost of Social Security and Medicare taxes.

Whether an employee is misclassified depends on the circumstances

There are not clear bright line rules about who is an employee and who is an independent contractor.

The good news about this lack of clarity is that employers cannot simply turn a worker into an independent contractor by labeling them one.

An independent contractor actually has to be treated as such in practice.

To give a clear example of an independent contractor, someone from an outside plumbing company who services a number of customers is probably an independent contractor if she, from time to time, comes and repairs a leaky faucet or toilet for a business.

On the other hand, a firm could not hire an in house janitor and treat him as an independent contractor, especially if he is taking direction about what projects to do and when and being directly supplied his tools and materials.

An employee in the area who feels she is misclassified may be getting seriously underpaid while also being deprived other protections. She should consider her legal options.