How an employer classifies employees has a direct impact on the worker’s potential for overtime pay and numerous other benefits. An employer might also experience changing tax consequences based on their overall staff classification. Unfortunately, misclassification can financially injure an employee ultimately leading to litigation.
When an employer improperly designates an employee, either intentionally or unintentionally, it could eliminate the worker’s potential for earning overtime pay. Either labeled as “exempt” or “nonexempt,” employees can see a dramatic increase in wage-and-hour disputes if the employer misclassifies the workers as exempt. An exempt worker is essentially a salaried position as they are unable to claim overtime hours. Additionally, exempt employees are not entitled to meal breaks and rest periods.
Are certain occupations more likely to see misclassification?
While nearly any occupation can experience a sudden change in status or misclassification as exempt, certain employees seem to be at greater risk.
Their respective organizations generally classify rideshare drivers as independent contractors, for example. This has been the subject of numerous legal disputes over the years. Many construction workers and subcontractors are designated as independent contractors in company paperwork. Occupations from janitors and cable installers to cooks and dock workers has been subject to misclassification. Treating an employee as an independent contractor can lead to the underpayment of wages, the absence of benefits and increased exposure to numerous risks.
It is the employer’s duty to ensure their workers are properly designated as exempt or nonexempt. This guarantees the employees receive the pay and benefits available to them. If an employer intentionally or unintentionally misclassifies a worker, the individual can suffer significant financial harm. It is wise to seek legal guidance to help resolve this matter and hold the employer accountable for their negligence.