The Risks of Mistakenly Treating “Employees” As Independent Contractors

Companies frequently choose to treat workers as independent contractors for a number of reasons: remaining in the bother of calculating and becoming to cover worker withholdings staying away from the employer’s needed expenses for unemployment insurance, workers’ compensation, along with other costs and, freedom from overtime along with other wage and hour rules. The end result is, treating employees as “independent contractors” can exert a effective attraction on small companies.

Like a number of other strong temptations, treating an worker just as one independent contractor may also lead to hell when the worker isn’t one. The litany of hellish effects, for any business as well as for its responsible officials and equity proprietors, is sobering.

First there’s a delinquent withholdings that doesn’t just the business but in addition its responsible officials and company company company directors might have joint and a lot of personal liability. Officials, company company company directors, people, managers, partners and limited liability partners can also be personally liable, jointly and severally, employing their business and one another for people claims’ costs, civil penalties and attorney charges whether it is determined the ” independent contractor” really was an “worker” once they were hurt while working. ORS 656.735.

Every time a misclassified worker is hurt in the office, they aren’t just liberal to bring an individual injuries action against their employer nonetheless the business loses the advantage of any defense while using employee’s own contributory negligence. ORS 656.020.

Likewise, individuals accountable for compliance through getting an employer’s unemployment insurance might be held personally liable, jointly and severally with one another utilizing their employer, for unemployment benefits and claim costs by having an worker misclassified just as one independent contractor. ORS 657.516.

Accordingly, should you treat anybody offering services having a business just as one independent contractor could be a decision which should be created using caution. An error couldn’t only damage your business but drain your very own finances too.