What misclassification can cost a worker
When an employee is treated as a contractor, the losses are usually spread across several areas rather than sitting in one paycheck. Unpaid overtime and minimum wage shortfalls are common, and New York and federal wage laws can add liquidated damages on top of the unpaid amounts. A worker may also have paid both halves of Social Security and Medicare taxes, or found no unemployment insurance or workers' compensation coverage when it was needed. Work expenses an employer would normally carry can matter under some wage rules. Which of these losses are recoverable, and from whom, depends on the law each claim is brought under.
Different laws, different tests
A business does not get to choose a worker's status, and a contract that says contractor does not decide it. Wage laws, unemployment insurance, workers' compensation, and tax rules each use their own test, so the answer for one purpose does not automatically carry over to another. New York has industry-specific laws for construction and for commercial trucking that start from a presumption of employment. Tax questions are usually handled with the IRS separately from a wage claim, and the IRS has its own process for asking it to determine status.
Building the damages picture
We start with how the work was actually done day to day and how you were paid for it. Then we compare hours worked with pay received, using your own records, such as app logs, texts, invoices, and bank deposits. Claims have filing deadlines tied to when the work was performed, so the oldest periods can drop away if a case waits. For businesses reviewing their own exposure, the same exercise helps estimate what a correction would involve and whether to restructure the arrangement before a claim is filed. Retaliation for raising a classification question is prohibited under many of the same laws, which matters if you are still doing the work.
