Employee misclassification refers to the incorrect categorization of an individual’s employment status by their employer. This can occur when an employee is classified as an independent contractor or a non-exempt worker, rather than a full-time employee. This misclassification can have significant legal and financial implications for both the employer and the employee. It can result in the employee being denied benefits and protections, such as minimum wage, overtime pay, and health insurance, that they are entitled to as a full-time employee. It can also lead to the employer avoiding certain taxes and insurance premiums, resulting in potential legal consequences and financial penalties. Employee misclassification can occur due to intentional actions by the employer to save costs or unintentional errors in understanding and applying employment laws. It is important for employers to accurately classify their employees to ensure compliance with labor laws and to protect the rights and well-being of their workers.
