Trying to find a job after college was tough. After an absurd amount of applications, two job offers knocked at my door. One of them, which I accepted, has evolved into a career in the staffing industry. The other I just had to reject. Here’s why.
After weeks of back and forth emailing, the offer finally arrived: I was to be hired as an independent contractor. I had heard the term “independent contractor” before, but wasn’t really sure what it entailed. A short online research started making things clearer but also more confusing. Why would they want to hire me as an independent contractor? From the job description and interview process it didn’t seem like I would have flexibility in my work decisions, or that I wouldn’t be subject to direction, training, and exclusivity of work. In fact, of the 20 factors in the IRS test to determine proper classification, at least sixteen would have clearly classified me as an employee.
Now I know that some companies rely on this “accidental misclassification” practice to get their way but, back then, I could have just accepted the offer given that the position was a great fit for me. The main aspect that raised my doubts was the fact that I would not be covered by employee benefits and the salary was too low to cover those expenses on my own. On top of that, such a low salary would translate into a very low net pay as I would be accountable for my own taxes. I decided to express my concern to the hiring manager, and her immediate response was: “We can put you on our payroll.” So, what was the whole deal about? Where they just trying to fool me?
Now I know better. And I’ve understood that cases like these abound. No wonder the government has set up a chase after such organizations, trying to make up for millions of dollars lost in taxes, while class action lawyers have been targeting them seeking unpaid employee benefits and overtime for misclassified workers.
If I were an opportunist, I would’ve mastered a plan of working there long enough to gather proof of their misclassification practices so I could sue the company later on. Lucky for them, I’m not that kind of person.
I wonder how many employers are still taking advantage of workers through similar practices. The report from the Government Accountability Office highlights that in 2007, states uncovered at least 150,000 workers who may not have received protections and benefits that they were entitled to because they were misclassified.
While some workers may agree to be misclassified as ICs in order to avoid withholding taxes or to prevent having to prove their immigration status, other workers may not be aware of the misclassification. They might also not be informed that by working as an IC they are not protected under many labor laws, and they are responsible for the payment of their own taxes each year, among other responsibilities commonly carried out by the employer.
I don’t mean to say that every employer that misclassifies workers does so with a bad intention. It could just be a lack of attention or misunderstanding of the laws. Unfortunately there are still some others out there trying to cash in the legislative gaps and the lack of enforcement while naive workers pay the price.
