While we tend to hear only about the major lawsuits, many companies misclassify workers without even realizing it. If there were a standard, objective test to determine whether a worker should be classified as an independent contractor or an employee, the matter would be simple. Of course, with each state having the power to determine its own rules, a standard test does not exist.
Still, the stakes for misclassification are quite high. Misclassifying carries risks such as liability for unpaid wages and overtime, liquidated damages equal to the amount owed in unpaid wages, treble damages, attorney’s fees, tax and benefits liabilities, hefty fines and more.
PayReel’s system has a defined worker classification system that takes into account federal, state and agency rules and includes a checks and balances process to ensure that the chosen classification has a solid precedent.
Bottom line: We take compliance seriously!