Addressing wage theft, misclassification

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From TheGazette —

Worker misclassification is “becoming, unfortunately, more and more prevalent,” said Catherine Ruckelshaus, general counsel and program director with the National Employment Law Project based in New York. Though misclassification has long-been a problem in the construction industry she added that it is beginning to pop up in retail.

Depending on how a worker is classified, an employer has various legal, tax and financial obligations. Those obligations include withholding Social Security and Medicare taxes from an employee’s wages, paying those taxes, in addition to an employee’s share, paying unemployment taxes, buying workers’ compensation insurance and complying with state and federal wage and overtime laws.

If an employer misclassifies an employee as an independent contractor rather than an employee, the worker often has tax burdens they wouldn’t have otherwise, such as paying self-employment taxes and quarterly estimated income taxes.

A misclassified worker also could be denied unemployment insurance benefits if laid off, lose employment protections such as minimum wage and overtime, and might not receive workers’ compensation if hurt on the job.

“Independent contractor misclassification almost always results in wage theft because of overtime and lack of record keeping,” Ruckelshaus said. “Sometimes it’s making people work off the clock and not paying them.”

Read the full story at Addressing wage theft, misclassification


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