What You Need to Know About Suing an Employer for Misclassification
Many state and federal laws allow one the right to sue an employer for misclassification. Here’s how to sue an employer for misclassification.
Employers may misclassify employees as independent contractors for personal gain and benefit. However, misclassification violates the Fair Labor Standards Act and denies the employee their rightful compensation. In this case, an employee may file a lawsuit against their employer.
What is An Independent Contract?
An independent contractor is a self-employed individual who makes decisions regarding their workload and work performance. An independent contractor does not need an employer’s directions and control, although they may provide services to a business through a contract.
Why do Employers Misclassify Employees?
By misclassifying an employee, an employer to avoid compensation for the following:
- Health insurance benefits
- Income tax withholdings
- Medicare and Social Security taxes
- Minimum wages
- Overtime pay
- Retirement account benefits
- Social Security benefits
- Unemployment benefits
- Vacation pay
- Workers’ compensation benefits
Related: How to Sue an Employer for Breach of Confidentiality
Suing An Employer for Misclassification
One cannot legally misclassify an employee and prohibit them from receiving rightful compensation and benefits under the Fair Labor Standards Act. The Act sets the standard and guarantees employees the right to minimum wage, overtime pay, and benefits. Therefore, an employee can file a lawsuit against their employer for any Fair Labor Standards Act violations.
A filing employee may recover the following damages:
- Interest and penalties
- Liquidated damages, resulting in doubled unpaid wages
- Lost benefits
- Unpaid wages
- Unpaid overtime pay
Related: Suing Uber for Wrongful Termination
Prove Your Misclassification Claim
When raising a misclassification claim suing an employer, one must prove their claim.
The court will consider the following factors:
- Degree of skill for work
- The employee’s appearance
- The employee’s freedom to work at other establishments
- The employee’s performance
- The set rate of wages
- The workplace location
- Training and work meeting requirements
- Who controls the workload
- Work schedule
FAQs About How to Sue an Employer for Misclassification
When should I classify as an independent contractor?
When one opens an established business, they should classify as an independent contractor.
Do independent contractors have the right to refuse a work assignment?
An independent contractor may refuse any work assignment before creating a contract with another individual or business.
What characteristics determine whether one is an independent contractor or an employee?
Behavioral control, financial control, and whether any benefits, such as health insurance, vacation pay, retirement accounts, etc., all determine whether one is an independent contractor or an employee.
Which fines can an employer pay for misclassification?
An employer may face $5,000 to $25,000 in fines for each misclassification violation.
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