Receiving a new job offer is an exciting moment when someone’s daily life and finances may change significantly. Employers could offer someone a more competitive salary or more flexible scheduling that makes a new position very appealing. Unfortunately, new jobs sometimes result in new challenges that could be concerning in nature. For example, employers might try to manipulate employment arrangements to avoid legal and financial responsibilities.
In recent years, many employers in Ohio and across the United States in general have started tricking workers into accepting unfavorable employment terms. They hire people that they intend to treat as employees but require that they fill out paperwork designating themselves as independent contractors. This misclassification can cause hardship for an affected worker for several reasons.
How misclassification hurts people
The exact incentives that employers have for misclassifying a worker as an independent contractor are often the source of risks and challenges for the worker. Companies can hire new talent with less risk and expense if they claim the worker is an independent contractor. However, the worker then has to accept increased personal risk and responsibility.
For example, the worker will need to start retaining money to make estimated quarterly tax payments and will have to pay more in employment taxes because their employer does not contribute on their behalf. Independent contractors usually do not receive overtime pay, regardless of how long they work.
The company will likely use someone’s status as a justification for not providing them with health insurance, paid time off or other basic benefits. In fact, independent contractors don’t have protection through workers’ compensation provided by their employers. They could end up hurt on the job and denied coverage when they need it the most. Finally, workers are at risk of financial hardship if they lose their jobs because they will not qualify for unemployment benefits.
Fighting misclassification benefits everyone
Workers who work like employees but receive compensation like independent contractors sometimes choose to take their employers to court. The Ohio courts could hold an employer accountable for misclassifying a worker and could award that employee workers’ compensation benefits or unpaid overtime after ruling in their favor.
The more companies that face consequences for misclassifying workers, the less likely future employers are to continue utilizing this unfair and manipulative tactic. Ultimately, realizing that an employer has tried to misrepresent the nature of an employment relationship might motivate a misclassified worker to seek legal guidance in order to fight back.