Find the right lawyer now

Employee Misclassification Lawsuits

Find a Local Employment Lawyer near You

What Is Employee Misclassification?

Employee misclassification occurs when an employer fails to properly identify a worker as either an actual employee or an independent contractor. Identification of a worker as either an employee or a contractor can have significant differences in the type of pay and benefits that the person receives. Misclassification occurs when the employer treats a hired employer like a contractor, or vice-versa.

Generally speaking, full-time employees may be entitled to benefits such as overtime, sick leave, and worker’s compensation. Independent contractors are generally not entitled under law to receive these from the entity they are providing services to, unless they include such provisions in their contract. 

What Is the Difference between an Employee and an Independent Contractor?

According to IRS guidelines, “employees” include any people who perform services for the employer in a situation where the employer can control the work to be done, as well as how it will be done. In contrast, independent contractors are defined as working in situations where the employer can control the result of the work, but not the methods or means in which the work is to be accomplished. In other words, independent contractors have more freedom to complete the work in their own way.

This difference can sometimes be hard to distinguished and may be viewed as somewhat subjective. When analyzing misclassification cases, IRS and other authorities employ what is called the “twenty-factor test,” which helps to determine a worker’s classification. This can include factors such as the supplying of tools to complete the job, degree of control over work projects, and benefits available to the worker.

What Are Some Common Employee Misclassification Disputes?

Some common employee misclassification disputes involve:

Depending on the nature of the dispute, a lawsuit may be necessary to resolve the issue. This may lead to a damages award, often to compensate the worker for lost wages, benefits or other losses. Alternatively, the worker may be required to return benefits or wages if they were not entitled to them. Some disputes may require investigation from a government agency such as the Wages and Hour Division (WHD) of the U.S. Department of Labor.

Do I Need a Lawyer for Help with an Employee Misclassification Lawsuit?

Employee misclassification can often lead to major legal issues and can result in significant losses for a worker. You may need to hire an employment law attorney in your area if you need assistance with an employee misclassification lawsuit. Your lawyer can help review your claim to determine what your legal rights are, and whether you might be owed any damages. Also, your attorney can be on hand to represent you during court meetings.

Photo of page author Jose Rivera

, LegalMatch Legal Writer

Last Modified: 03-04-2015 12:09 PM PST

Law Library Disclaimer
  • No fee to present your case
  • Choose from lawyers in your area
  • A 100% confidential service
What is LegalMatch?

We've helped more than 4 million clients find the right lawyer – for free. Present your case online in minutes. LegalMatch matches you to pre-screened lawyers in your city or county based on the specifics of your case. Within 24 hours experienced local lawyers review it and evaluate if you have a solid case. If so, attorneys respond with an offer to represent you that includes a full attorney profile with details on their fee structure, background, and ratings by other LegalMatch users so you can decide if they're the right lawyer for you.