The misclassification of workers as contractors when they are actually employees has wide-reaching implications for employees and employers alike, but the risk is typically greater for employers, as it can expose you to potential liability for significant penalties, interest and legal fees, as well as outstanding payroll deductions.
It is important to remember that defining an employment relationship as that of a contractor does not make it so in the eyes of the law. That is true even if the worker joins you in proclaiming that they are a contractor. Courts and government agencies will assess the true nature of the relationship: is the worker in business for themselves, providing services to you pursuant to an independent business relationship, or are they really part of your team?
Any benefits of paying someone as a contractor are usually outweighed by the risks, so you should make an informed decision before deciding to pay people that way.
How we can help
All of these issues can be avoided by seeking legal advice before making hiring and termination decisions. We can help you understand the complex legal issues at play when classifying workers and drafting Employment Contracts, allowing you to meet your legal obligations and minimize liability.
We want to be your Trusted Advisor, your Chief HR Law Officer, your business partner. Let us be part of your team, so that we can look after your employment law issues, and you can focus on your business.
