CWS 3.0: August 1, 2012

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Misclassification Attractive, but Costly

It’s no wonder companies are tempted to misclassify workers as independent. According to one report, companies stand to save a quarter of the cost of employees by misclassifying them, creating an unfair advantage over their competitors.

But states and federal agencies are on the lookout for violators, and workers themselves often will trigger an audit if they are hurt on the job or apply for unemployment benefits when a job is completed. Because it can be costly when found noncompliant, companies should be sure their staff is classified correctly. Here are some traps to avoid.

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