Misclassification Confusion Of Employees and Subcontractors
The misclassification confusion applies to subcontractors not employees. We received a few emails today concerning yesterday’s post. There are two different types of misclassification of employees. One is a much more serious situation than the other.
The first involves misclassifying an employee as a subcontractor. If it can be proven the employer purposely misclassified an employee as a subcontractor to avoid paying Worker Comp premiums and taxes, this is a very serious violation of the Workers Comp insurance and tax laws. Operating a business under these circumstances can result in very serious consequences and should be avoided at all costs.
The second situation involves an employer disputing or attempting to correct their employees job classification codes.
Please do not let all of the press coverage over misclassifying employees as subcontractors vs. employees discourage you from making sure the employees are properly classified under the Workers Compensation policy. We have never seen an instance where an insurance carrier implied or accused an employer of doing something illegal by questioning how their Workers Comp policy is constructed.
However, we do discourage any employer from disputing an insurance policy or premium audit without some basis other than “we paid too much in premiums.” This may possibly ruin a great working relationship with the respective insurance company.
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