Misclassification of an employee usually happens when the company tries to cut costs by classifying their employees, who are working for them full-time, as an independent contractor and, thus, stripping them of their benefits and incentives as an employee.
Independent contractors are those who can work for two companies simultaneously provided that they deliver the demands of each. Because of this, they do not enjoy the privileges and benefits given to workers who are working full-time for a single company.
By classifying them as independent contractors, the employers won't have to pay Social Security taxes and Medicare taxes that they should for their full-time employees. Aside from this, the employees who are misclassified won't also be provided with workers compensation and unemployment compensation as well as other benefits such as their protection from discrimination.
One of the most important benefits that full-time employees enjoy is their protection from discrimination and harassment. With this, they are sure to work without having to worry about a hostile work environment or maltreatment from their superiors.
Without it, the worker's productivity may be affected because of the hostility that he is exposed to while working and the retaliation that he may suffer from his boss once he files a complaint about any inappropriate action or decision.
Another important thing is the workers' compensation. It will compensate the damages once an employee has incurred a work-related injury or illness. This way, workers can be sure that they will be treated for their injuries without worrying about the expenses that will result from it.
Unemployment compensation is as important because it provides workers of their needed income once they have been laid off from the company. These benefits will help them find another job and help in providing their basic needs.
Aside from all these, the misclassified workers' Medicare and social security taxes won't be paid by the company and so they won't be able to receive retirement or disability benefits once needed.
These benefits that workers will be stripped off are important. They will ensure the workers' good working condition and so those who will be victims or have been victimized by these misclassifications must hire an employment law attorney and file a complaint.