Independent Contractor Misclassification
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What Is Employee Misclassification?
When workers who should be legally classified as employees are misclassified as independent contractors, they do not enjoy wage protection, health benefits and other safeguards they are entitled to by law. However, many businesses attempt to do exactly this to avoid tax implications, pay lower wages, avoid providing benefits, and shield themselves from liability.
If your income and stability are threatened by employee misclassification in Montana, our attorneys can help. Based in Missoula, one of our partners, attorney Torrance L. Coburn, at Tipp Coburn Lockwood, P.C., has represented employees for over a decade and can navigate the complicated legal waters of surrounding labor disputes.
The Difference Between Independent Contractors And Employees In Montana
In Montana, independent contractors differ from employees in three key ways:
- They have an Independent Contractor Exemption Certificate (ICEC) issued by the state Department of Labor and Insurance or have purchased workers’ compensation insurance
- They are free from control or direction from the businesses hiring them for their services
- They are engaged in their own independently established business, occupation, trade, or profession
In contrast, employees work exclusively for their employer’s business and are consequently subject to more control and direction.
Attorney Torrance L. Coburn fights on behalf of Montana workers to ensure they are treated fairly and justly.
Misclassified? Call for a free consultation.
Deciding Whether A Worker Is An Independent Contractor Or Employee
- Behavioral control: When a business maintains the right to direct and control the work performed by the worker, they are an employee. The categories of behavioral control include the type of instructions given, the amount of detail given, any evaluation systems in place to review the work, and ongoing training.
- Financial control: If a business has the right to control or direct financial and business aspects of a worker’s job, the worker should be considered an employee. In particular, employees are paid through regular wages rather than a flat fee and do not lose money if a project falls through.
- Relationship: How do the worker and employer perceive their interactions with one another? Benefits such as health insurance, vacation, and sick pay, as well as the permanency of the relationship, all indicate a worker is an employee.
If your job meets these criteria but you are classified as an independent contractor, there can be serious repercussions for your finances.
Tax Implications For Misclassified Workers
When you are an employee, your employer is responsible for withholding income taxes, paying social security, and paying Medicare taxes. When you are an independent contractor, employers do not have to withhold or pay any taxes. These earnings are instead subject to a self-employment tax. Misclassifying an employee as an independent contractor makes the employer liable for paying employment taxes.
“Torrance helped me with a labor and employment issue. He was knowledgeable, responsive and professional. He was also extremely approachable and friendly.”
“Extremely knowledgeable and professional. I can’t recommend him highly enough.”
Make Sure You Are Receiving The Pay And Benefits You Deserve
Attorney Torrance L. Coburn fights on behalf of Montana workers to ensure they are treated fairly and justly. If you are a worker and believe you were improperly classified as an independent contractor, contact Tipp Coburn Lockwood. We will help ensure you are properly classified as an employee and receive the pay and benefits you deserve. To learn more, contact us online or call 406-812-7634 today to schedule a free consultation.
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To begin your defense, schedule your free consultation by calling 406-812-7634 or contacting us online.