What Is Employee Misclassification And How To Report It?

Employers who misclassify their workers as independent contractors and not legitimate employees are referred to as Employee Misclassification. The U.S. Department of Labor states that this can result in workers not receiving the benefits and protections they are entitled to. These may include the federal Fair Labor Standards Act’s (FLSA) minimum wage, overtime pay, family and medical leave, unemployment insurance, secure workplaces, and other benefits.

There can be cases when employers can mistakenly misclassify their staff members. However, some employers misclassify their workers purposely to save money on benefits and labor costs. This is why it becomes essential for the employees to know how to report a business for misclassification of employees.

Ways to report employee misclassification

If you doubt that your employment status has been incorrectly classified, you may talk to your employer to check if your incorrect status can be reviewed, states the Department for Professional Employees.

Contact the labor and tax authorities

One of the ways for reporting an employee being misclassified is by contacting the labor and tax authorities in their respective states is one way that employees can report employment misclassification. Workers may even submit information anonymously concerning employment misclassification and the various labor law offenses that surround it in several states.

State reporting

If employers refuse to pay worker’s compensation or unemployment insurance then state reporting might be a reasonable choice.

Contacting the Federal Labor Department

Workers can report to the Federal Labor Department if they are paid less than the minimum wage, overtime compensation has been withheld, or they have been incorrectly designated as independent contractors.

Form SS-8

Employees can submit Form 3949-A to the IRS anonymously to notify their employers if employee misclassification results in tax fraud. Workers can submit the non-anonymous Form SS-8 if they want the IRS to determine their worker status.

Reporting misclassification is the right of every employee which should be reported as it can land the employers into trouble.