Misclassifying employees, either accidentally or intentionally, can result in serious consequences for businesses.
The risks associated with employee misclassification include hefty penalties, fines, and owing back taxes. In addition, employers might find themselves responsible for reimbursing misclassified workers by covering their lost wages and any unclaimed benefits.
Incorrectly classifying employees can also create an environment where legal issues may arise. These complications can involve not only the affected workers but also unions and other groups that suffer due to improper employee categorization. By understanding the potential consequences of misclassification, businesses can take the necessary steps to avoid these pitfalls and maintain compliance.