Defending Against Misclassification Allegations in Wage and Hour Cases

Misclassification occurs when an employer classifies an employee, in violation of New York state and federal law, as an independent contractor in order to save money. For employees, this places them in a position where they lose out on employment benefits and income opportunities. The business may achieve short-term savings but, in the long term, takes on significant risk. 

What Are The Potential Impacts When an Employee is Misclassified?

The key distinction in this discussion is how an employer classifies the people who work for them. An employee is eligible for certain benefits based on their employment status. An independent contractor is not eligible for these same benefits. Overtime pay, meal breaks, workers’ compensation benefits, and disability benefits are just a few of the handful of benefits employees in New York State are owed by their employers. Independent contractors receive none of these benefits. 

When an Employee is Misclassified as an Independent Contractor

The assumption is that when a person files a misclassification lawsuit, it is to challenge an employer trying to avoid paying benefits to their employee. There are certain characteristics of employment that determine whether an individual is an independent contractor or a company employee. 

Authority over an individual in the workplace is one factor closely examined when determining whether a person is an independent contractor or an employee. Employees are typically told by their superior what their work hours are, where they will work, and what their hourly rate of pay is. Salaried personnel are most typically employees rather than independent contractors. 

Penalties Associated with Employee Misclassification Cases

There are many, many employment-related laws that New York City businesses must comply with. If found liable in a misclassification claim, an employer may be on the hook for back pay, overtime, retirement benefits, and other benefits that should have been paid to that employee over the years. In short, there is a substantial amount at stake in a case where an employee wins a misclassification lawsuit. 

While it is certainly reasonable to argue that a mistake was made in misclassifying an employee, it is not a valid legal defense. On top of that, an intentional act of misclassifying an employee can result in additional penalties being assessed against an employer. Damages double when an employee can prove that the misclassification resulted in unpaid overtime or minimum-wage claims. 

In particular, certain types of workers are exempt from wage-and-hour laws. This is true if that employee works in an executive, administrative, or professional role. Both New York state and federal law have different tests for determining whether a worker appropriately falls into any of these exempt categories. With so much at stake in how a worker is classified, it is best to consult with an experienced New York City employment defense lawyer. 

Proceed with Confidence in an Employee Misclassification Case: Contact Attorney Daniel Knox

Contact Attorney Daniel Knox today for a free case review. Our team of legal professionals serves businesses across New York City in matters related to employee misclassification defense.