I negotiate resolution of worker misclassification penalties issued by New York State (“NYS”), when businesses get the independent contractor relationship wrong. One of the most important things to know is the true legal definition. I like to sum it up this way:
Independent Contractor = Independent Business Owner with a Contract to perform the same services the business offers to others
Freelancers, independent contractors, and permalancers often fail to realize they are being characterized as independent businesses, and many of them are actually misclassified employees. Thus, their employers might be subject to:
- Penalties for failure to provide disability, Paid Family Leave, unemployment (“UI”), and workers’ compensation (“WC”) insurance
- Unpaid payroll taxes, penalties, and interest
- The costs of any UI or WC claims made while uninsured
- Criminal charges, Stop Work Orders, Judgments and Liens, and the public debarment list
Are you an employer that is unsure you have been properly classifying workers? Or are you a freelancer who might have been misclassified? Schedule a consultation for review of your contract or workforce structure.