Fact Sheet 2016
Misclassification as an independent contractor has several consequences that affect governments and workers. Employers who misclassify employees are failing to provide unemployment insurance (UI) and workers’ compensation (WC) as well as failing to pay employer withholding taxes—leaving workers with large tax bills.
Employees who believe they have been misclassified as independent contractors have several avenues for resolution. These suggestions are not intended to substitute for legal advice, nor are they intended to be an exhaustive list of available options or remedies.
First, workers can contact their state departments of revenue and labor to report suspected misclassification, including UI, WC, and tax fraud. Many states give workers the option of anonymously reporting employers who are erroneously misclassifying employees as independent contractors. Click here for a complete list of state resources for UI, WC, and tax fraud reporting.
Second, if the employer has misclassified the worker as an independent contractor and paid less than minimum wage or failed to pay overtime, then the worker can contact the U.S. Department of Labor Wage and Hour Division to report minimum wage and overtime pay violations.
Third, workers can anonymously report suspected tax fraud (employer failure to withhold taxes) to the Internal Revenue Service (IRS) by using Form 3949-A. Workers can also file Form SS-8 with the IRS for a determination of worker status. Form SS-8 CANNOT be filed anonymously.
Finally, workers always have the option of seeking legal counsel.
For more information about misclassification of employees as independent contractors, click here.
For more information on professional workers, check the DPE website: www.dpeaflcio.org.
The Department for Professional Employees, AFL-CIO (DPE) comprises 22 AFL-CIO unions representing over four million people working in professional and technical occupations. DPE-affiliated unions represent: teachers, college professors, and school administrators; library workers; nurses, doctors, and other health care professionals; engineers, scientists, and IT workers; journalists and writers, broadcast technicians and communications specialists; performing and visual artists; professional athletes; professional firefighters; psychologists, social workers, and many others. DPE was chartered by the AFL-CIO in 1977 in recognition of the rapidly growing professional and technical occupations.
DPE Research Department
815 16th Street, N.W., 7th Floor
Washington, DC 20006
Katie Barrows August 2016