Businesses both large and small employ workers to help perform a wide range of job duties. Some employees may work part-time while others work full-time. Some workers may be considered to be independent contractors as opposed to employees. How a business chooses to classify a worker is very important because the potential tax penalties that come with the misclassification of a worker can have a devastating financial impact.
At the Orange County law firm of Burkhalter Kessler Clement & George LLP (BKCG), our lawyers provide skilled legal defense for employers who are embroiled in employee classification disputes. If you are concerned that you have not properly classified your employees, are under investigation for alleged misclassification or have been accused of improper classification of your employees, it is important to get experienced legal representation on your side as soon as possible.
Both Federal And State Agencies Have The Power To Investigate Classification Matters
The Internal Revenue Service (IRS) and numerous California government agencies can investigate employee classification matters. How employees are classified is important to both state and federal agencies because employers may be exempt from paying taxes on Social Security, Medicare, income, unemployment insurance and other taxes for workers who are part-time or are independent contractors. If an employer is discovered to have wrongfully benefited from these tax breaks, the monetary penalties can add up quickly.
How Are Employee Classifications Determined?
Some of the factors used by government agencies to determine how an employee should be classified include:
- Whether an employer directs the worker when it comes to performing job duties
- Whether a worker has to go through training
- Whether the employer sets the hours that are worked
- Whether the job duties differ from those performed by full-time employees
- Whether the worker is on-site or performs the job at an independently established place
There is no single factor that an agency can point to in order to make their ultimate determination and the above are just some of the factors that an agency is likely to look at. Our attorneys can review the classification of your workers and can mount effective arguments in your company's defense when it comes to employee misclassification.
Contact Our Lawyers For Help With Employment Litigation Defense
We can help protect your important business interests if you have been accused of misclassification of workers. Contact us online or call 949-975-7500 to schedule a consultation. From our law office in Irvine, we provide employment litigation defense services to companies throughout California.