In the dynamic landscape of the modern workforce, the classification of workers as either employees or independent contractors has become a focal point of legal scrutiny. In Massachusetts, misclassification of independent contractors can have significant consequences for both employers and workers. At Greene and Hafer, we understand the complexities surrounding this issue and are committed to ensuring individuals are properly classified and compensated as well as providing businesses with insights into Massachusetts law to ensure compliance and fair treatment for workers.
Understanding the Importance of Classification
The classification of workers as independent contractors or employees is not merely a matter of semantics. It carries profound implications for various aspects of the working relationship, such as tax obligations, eligibility for benefits, and compliance with labor laws. Massachusetts, like many other states, has specific criteria to differentiate between employees and independent contractors.
Massachusetts Independent Contractor Law
Massachusetts uses a three-pronged test, commonly known as the ABC test, to determine a worker’s classification. To be considered an independent contractor, a worker must meet all three of the following criteria:
Control
The worker is free from the employer’s control and direction concerning the performance of the service, both under the contract for the performance of the service and in fact.
Independence
The worker performs services that are outside the usual course of the employer’s business.
Business Entity
The worker is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.
Consequences of Misclassification
Misclassifying employees as independent contractors can lead to severe consequences for employers. In Massachusetts, repercussions may include:
Wage and Hour Violations
Independent contractors are not entitled to minimum wage, overtime pay, benefits or other protections provided to employees under state and federal laws. If an employee is misclassified, an employer will be liable for up to three times the value of all of those losses. Needless to say, misclassifying a worker as an independent contractor will expose and employer to considerable liability as a result of those wage and hour violations.
Tax Implications
Employers may also face tax-related penalties for failing to withhold and remit payroll taxes for misclassified workers.
Employee Benefits and Protections
Misclassified workers may be denied access to essential benefits such as health insurance, paid family medical leave, workers’ compensation, and unemployment benefits. An employer who has misclassified a worker and, therefore, failed to pay these benefits may be liable to the worker for three times the value of those benefits.
Legal Actions
Employers may be subject to legal action, including fines, penalties, and potential lawsuits by misclassified workers. Individuals who believe they have been misclassified must first file their claims with the Attorney General’s Wage and Hour Division. From there, an individual may request the opportunity to pursue a private lawsuit against the Employer.
How Greene and Hafer Can Help
If you believe you’ve been misclassified, it’s important to know your rights and take action. Greene and Hafer can provide guidance, assess your situation, and help you pursue legal action if necessary. Located in Boston, Massachusetts, Greene and Hafer represents people who have experienced misclassification and our attorneys have extensive experience in handling misclassification cases. To schedule an appointment with an experienced lawyer, contact our office.
