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Misclassification as an independent contractor is often costly

Flexibility and control are among the many perks of being an independent contractor in Florida. However, if your role and responsibilities resemble those of a full-time employee and you lack the independence of a contractor, reclassification may be necessary. This can have significant financial repercussions. At The Law Office of Michelle Cohen Levy, P.A., we have experience reviewing employment contracts to determine whether workplace responsibilities and requirements are overreaching for a contractor role.

The Department for Professional Employees reports that employee misclassification in the U.S. is widespread. When erroneously classified as an independent contractor, employees face higher levels of taxation, do not receive overtime and lose workplace protections. If you hold a position classified as a contractor instead of an employee, you also may not qualify for unemployment or disability compensation in the event you become unemployed.

The lines between a self-employed independent contractor and employee may become blurred in certain circumstances. Contractors typically operate under an agreement signed by both parties dictating the scope of work. A contractor controls how the project progresses and treats the employer as a client. If the opportunities for profit and loss are entirely under your control, classification as an independent contractor may be appropriate. The IRS provides guidance, such as the following, regarding whether a worker is a company employee:

  • The organization controls how you complete job-related tasks.
  • The organization controls financial aspects, such as payment methods, reimbursement for expenses and supplies.
  • The organization provides employee-style benefits, such as insurance and vacation pay.

In circumstances where an organization has the right to control all aspects of a job or position, it should typically fall under the employee classification. You may not receive the benefits employees enjoy if your position is erroneously classified as an independent contractor. Visit our webpage for more information on this topic. 

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