Misclassification of employees as independent contractors is a serious problem. Here we dispel some of the pervasive myths about misclassification. Select the images below for information dispelling each myth.
Myth 1: My boss calls me an independent contractor, not an employee. But it really doesn't matter as long as I get paid.
If you are misclassified as an independent contractor, you may be denied benefits and protections to which employees are legally entitled. Misclassification also has negative effects on businesses.
Myth 2: If I am classified as an independent contractor, I am not eligible for unemployment insurance (UI).
You may still qualify for UI even if you are classified as an independent contractor.
Myth 3: I received a 1099 tax form from my employer, and this makes me an independent contractor.
Receiving a 1099 does not make you an independent contractor.
Myth 4: I have been told that I am an independent contractor, this means that I am not entitled to any of the benefits and protections provided to people who meet the definition of an "employee".
Just because you are told that you are an independent contractor doesn’t mean that you don’t meet the legal definition of an employee. And even if you are a legitimate independent contractor under one law, you may still be an employee and entitled to the protections provided under other laws.
Myth 5: I am an independent contractor because I signed an independent contractor agreement.
Signing an independent contractor agreement does not make you an independent contractor.
Myth 6: I am not on the payroll, so I am not an employee.
Even if you are not on the payroll, you may still be an employee.
Myth 7: I have my own employer identification number (EIN) or paperwork stating that I am performing services as a Limited Liability Corporation (LLC) or other business entity. This means that I am an independent contractor.
Even if your employer requires you to obtain an EIN or paperwork stating that you are performing services as an LLC or other business entity, this does not make you an independent contractor. There are no forms you can file with the IRS or a title your employer can give you that will automatically make you an independent contractor.
Myth 8: My employer wants me to be an independent contractor, and that means I am not an employee.
Your employer cannot misclassify you as an independent contractor for any reason.
Myth 9: I telework or work off-site, so I am an independent contractor.
You are not an independent contractor simply because you work off-site or from home.
Myth 10: I have been an independent contractor for years; this means I will continue to be an independent contractor.
Being an independent contractor in the past does not mean you are not an employee that is misclassified as an independent contractor.
Myth 11: I am an independent contractor because it is established practice in my industry to classify workers like me as independent contractors.
“Common industry practice” is not an excuse to misclassify under the FLSA.