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What is a misclassified worker and can it affect your business?

As you know, there are many rules and laws regarding owning a business in Florida, especially when it comes to having employees. Depending on the nature of your business, you may have decided to classify some of your workers as independent contractors. It’s important to understand what exactly an independent contractor is, and whether the ones working for you are misclassified.

An independent contractor is someone who does work for you but is not technically considered an employee of your company. If you own a beauty salon, your hairstylists may be independent contractors who rent space at your salon but are responsible for their own supplies and set their own hours. On the other hand, the receptionist who answers the phones would not be considered an independent contractor, nor would a hairstylist who receives an hourly salary and for whom you supply equipment.

Often, employers misclassify employees by accident, not fully understanding independent contracting rules. However, as the U.S. Department of Labor explains, it is not uncommon for some employers to deliberately label employees as independent contractors in an attempt to avoid paying them a minimum wage or overtime, as well as to deny them certain protections and benefits like a safe workplace, workers’ compensation, family and medical leave and unemployment insurance.

Misclassifying employees can leave your company vulnerable to legal action, regardless of whether the misclassification was accidental or intentional. Therefore, it is important to educate yourself on the employment rights of those working for you. This information should not replace the advice of a lawyer.

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