One of the more substantial mistakes a business can make is to misclassify employees as independent contractors. An employee whose employer erroneously labels them as an independent contractor may be denied health care insurance coverage, family leave, and unemployment protection. They may also be deprived of the right to receive a minimum wage and overtime compensation. The employer that makes this mistake runs the risk of paying thousands — or millions — in a civil action. In short, both employers and employees have reasons to want to “get it right” when it comes to correct classification, and getting advice from a knowledgeable Atlanta wage and hour lawyer can be crucial to achieving this objective.
A federal case that started in Virginia provides an example of how costly misclassification can be. The employer was a Virginia-based medical staffing company that provided nurses to healthcare facilities in that state and the surrounding areas. The workers were a group of nurses, nurse practitioners, and nursing assistants.
To receive assignments from the company, the entity required candidates to fill out an “application for employment.” That document identified the nurse as an “employee” and the company as the “employer.” If the nurse successfully completed the employment application process, they ultimately signed an “independent contractor agreement,” which included a 12-month non-compete clause.