Worker misclassification refers to the practice of employers treating individuals as independent contractors when they should be classified as employees. This issue is of particular concern in labor and wage laws as it can lead to negative consequences for workers and employers alike. To address this problem, Wisconsin law creates a default to treat all workers as employees. Meaning that, unless the employer can prove that the worker meets the legal criteria to be considered an independent contractor, it will be presumed that the worker is an employee.
The burden of proving that a particular worker is an independent contractor rather than an employee lies with the employer. The employer must provide evidence supporting the independent contractor status. To determine whether a worker qualifies as an independent contractor, Wisconsin labor laws consider several factors such as the type of work the individual performs, the control the employer has over the individual’s schedule and methods of performing the work, and the resources used to perform the work. These factors essentially assess the level of control the employer has over the worker and the nature of their working relationship to investigate the details of the relationship, rather than looking at the self-assigned labels given to the relationship.
Often times, it can be difficult to ascertain the differences between employees and independent contractors as it requires a detailed fact and legal analysis. Mistakes in classification, however, can have serious implications for both employers and workers. For employers, misclassification may result in legal penalties, fines, and back payment of employment taxes and contributions. Additionally, employers may be held liable for unpaid wages, overtime pay, and other benefits owed to misclassified workers. For workers, misclassification can cause them to be denied access to important benefits and protections guaranteed under labor laws, such as minimum wage, overtime pay, workers’ compensation, unemployment insurance, and protection against discrimination. Misclassified workers may also face difficulties in obtaining health insurance coverage or retirement benefits.
To ensure compliance with labor laws and address instances of worker misclassification, Wisconsin has established enforcement mechanisms. The Wisconsin Department of Workforce Development (DWD) is responsible for investigating complaints related to misclassification and enforcing labor laws in the state. If it is determined that a worker has been misclassified, various remedies may be available. These can include back payment of wages and benefits owed, reimbursement of expenses incurred by the worker due to misclassification, and potential damages for any harm suffered because of the misclassification.
Don’t let misclassification issues go unaddressed. If you suspect that you have been wrongly classified as an independent contractor or exempt employee, or if you are an employer with questions, it is crucial to seek legal assistance promptly. Contact OVB Law & Consulting, S.C. today to schedule a consultation and discuss your case with our experienced employment law attorneys.
