Knowledgeable Construction Workplace Misclassification Lawyer
Modular manufacturers, builders, installers, and transportation companies often rely on a flexible workforce to adapt to the changing needs of their projects. Conventional construction companies do as well. Employee misclassification is receiving increased attention from federal and state labor and tax authorities, especially in the construction industry, as misclassifying workers as independent contractors instead of employees can lead to serious repercussions for employers.
Misclassification can extend beyond simply correcting payroll errors, encompassing significant financial penalties, back wages, tax liabilities, and criminal charges. We are experienced employee misclassification attorneys who focus on helping construction-related businesses avoid independent contractor misclassification and defend against employee lawsuit actions or government audits.
The High Cost of Employee Misclassification
Businesses should have a solid grasp of employee misclassification laws and the key factors that set employees apart from independent contractors. Without this understanding, they could encounter a range of potential liabilities and disruptions.
The issues from construction workplace misclassification include:
If a worker misclassified as an independent contractor suffers a workplace injury, your business may find itself without workers’ compensation coverage for that individual, leaving you directly responsible for their medical bills, lost wages, and permanent disability payments.
If a worker is misclassified, employers can be held liable for unpaid overtime, minimum wage, federal and state payroll taxes, workers’ compensation premiums, and even interest and penalties on all these amounts. These liabilities can accumulate quickly, potentially leading to bankruptcy.
Federal agencies like the IRS, the Department of Labor, and state labor and tax departments are aggressively targeting the construction industry for worker misclassification audits. These investigations are intrusive, time-consuming, and often cause severe penalties.
Misclassified workers can file individual or class-action lawsuits seeking back wages, benefits, and statutory damages. A single employee misclassification lawsuit can be costly, both in terms of legal fees and potential judgments.
In serious instances of intentional misclassification, especially under laws such as the Pennsylvania Construction Workplace Misclassification Act, employers or responsible officers could encounter criminal charges, including fines and even imprisonment.
These risks underscore the necessity of retaining an experienced employee misclassification attorney to manage and defend against worker misclassification challenges.
Frequently Asked Questions
What is employee misclassification in the construction industry?
Employee misclassification occurs when an employer wrongly declares a worker an independent contractor when federal and state laws say the worker should be considered an employee. This happens frequently to avoid paying taxes, providing benefits, and performing other duties as an employer. And just because your company and the worker agree that he will be a subcontractor, even in a written contract, does not prospect you if it turns out that under state and federal law, the worker does not qualify as a subcontractor. You may thing you are saving money but this mistake can be costly and sometimes devastating to the employer.
Why is the difference between employees and independent contractors critical for employers?
This difference is very important because it tells employers what they must do legally regarding taxes, minimum wage, overtime pay, workers’ compensation insurance, benefits, and follow different labour laws.
What are the potential penalties if an employer is found guilty of worker misclassification?
If found guilty of worker misclassification, an employer faces severe penalties, including back wages (including overtime), unpaid federal and state taxes, interest, fines, and workers’ compensation premiums as well as potential criminal penalties and lawsuits from the wrongly classifieds worker if he is injured on the job.
How can an employee misclassification attorney help my construction business prevent misclassification issues?
An employee misclassification lawyer can help by checking how your current workers are classified, giving you advice on the legal tests for independent contractor status, writing up independent contractor contracts that are in line with the law, and showing you the best ways to manage these relationships so that they reflect your status as an independent contractor.
Avoid an Employee Misclassification Lawsuit With the Right Help
Construction businesses can’t ignore the risks of construction workplace misclassification. We have the in-depth knowledge and experience to help your business navigate these legal requirements, keeping you from paying large fines.
Don’t let mistakes in classifying workers put your business at risk. Contact us to discuss your misclassification concerns and keep your workforce structure safe.