What are the possible consequences of improperly classifying a worker as an independent contractor?
Minneapolis employment law attorney Marnie DeWall explains that the consequences for misclassifying an independent contractor are typically tax related.
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The consequences related to misclassifying someone as an employee versus an independent contractor are not surprisingly usually monetary in nature. What typically happens is if there’s a misclassification in most cases, well in all cases where there’s penalties it’s going to be an independent contractor was improperly classified and should have been classified as an employee. And you’re going to be responsible, you the employer, would be responsible potentially for paying back worker’s compensation insurance, back taxes, some penalties associated with that, perhaps unemployment compensation insurance. So really the consequences come down to anything you should have been doing for an employee and for somebody who is an independent contractor you’re going to need to go back and do those things potentially if in fact a government agency determines that that person has been misclassified.