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The Litigation Boutique LLC
303-578-2833
  • Home
  • About
    • Leah P. VanLandschoot
    • Ruth A. McLeod
    • Jonny Campbell
  • Practice Areas
    • Employment Law
    • Civil Litigation
    • Discrimination
    • Employment Trade Secrets
  • Blog
  • Contact

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Why employers may accidentally misclassify workers

On Behalf of The Litigation Boutique LLC | Oct 26, 2023 | Blog, Employment Law

In Colorado, some employers unintentionally misclassify their workers as independent contractors. Misclassification can lead to job insecurity and not getting benefits.

It is important to be aware of common causes of inadvertent misclassification and how to recognize it might be happening.

Common causes of inadvertent misclassification

Employment classification laws can be intricate. Employers may accidentally misclassify workers due to a lack of understanding or confusion regarding these laws.

In some industries, job roles have evolved over time. Employers might not have updated their classification practices, resulting in misclassification.

Also, in certain industries, misclassification has become common. Employers might mistakenly follow this pattern without assessing its legality.

Signs of inadvertent misclassification

To figure out if misclassification might apply in your situation, look for common signs.

  • Level of Control: If your employer controls your work methods, hours and location, misclassification may be at play. As the IRS explains, “The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work,” and not how a worker does the work.
  • Tools and Equipment: Independent contractors generally provide their tools and equipment. If you are using company-owned tools, this might signal misclassification.
  • Training: Employers often provide training to ensure employees perform work according to employers’ standards. Extensive training could indicate employee status.
  • Exclusivity: Independent contractors often work for multiple clients at the same time. If you exclusively work for a single business, it may be misclassification.
  • Financial Independence: Independent contractors often have more control over their rates and expenses. If you lack financial control, it may be misclassification.
  • Benefits and Taxes: Receiving employee benefits could suggest errors. So could having taxes withheld from your payments or the employer’s liability insurance covering you.

By understanding these causes and signs, workers in Colorado can better assess their employment status. This helps ensure proper working conditions.

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