MISCLASSIFICATION OF EMPLOYEES TO AVOID PAYROLL TAXES AND BENEFITS
ILLEGAL MISCLASSIFICATION OF EMPLOYEES
The law requires employers to pay certain benefits and payroll taxes for their employees. Unfortunately, some employers try to avoid paying required payroll taxes or providing them with required benefits and place them in a position of having to pay all of their own taxes by classifying them as “independent contractors” and giving them a 1099 tax form rather than a W-2. Misclassification of employees is not only wrong, it is also illegal.
OTHER TYPES OF INCORRECT WORKER CLASSIFICATION
Misclassification occurs in a variety of ways in addition to treating employees as independent contractors. Employees are sometimes paid completely “off the books,” or paid “under the table,” usually in cash. Or, employees who have no management responsibilities or are actually hourly employees are expected to work overtime hours without overtime pay by misclassifying them as managers. The effect of each of these misrepresentations of an employee’s status is that the employer escapes their obligation to pay Social Security, Medicare, Workers’ Compensation, Unemployment Insurance contributions, and other benefits that they would provide to W-2 employees, such as contributions to a retirement plan and health. This significantly reduces the value of the employees’ compensation and denies them the safety net that the law provides for, while cheating the government out of legitimate employment taxes.
If you feel that your employer is deliberately misclassifying workers to skirt the law, the San Diego employment attorneys at Haeggquist & Eck can help. Our attorneys are well-qualified and dedicated professionals who are committed to protecting your rights in the workplace. Penalties for knowingly misclassifying an employee can be anything from $100 to $750 or more per day that the employee was misclassified. Employers can also be penalized with as much as six months in jail. Employers shown to be fraudulently misrepresenting the status of their employees will also be required to pay the required taxes for the misclassified worker. Other penalties and restrictions can be placed upon your employer as well.
With our experience on your side, you will have the best chance of recovering money and benefits that you have been denied by your employer’s wrongdoing.
Call Haeggquist & Eck today for a free, no-obligation consultation. We are committed to justice in the workplace and the protection of the rights of all California workers.