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[ˌmɪsˌklæsɪfɪˈkeɪʃən]
The illegal practice of categorizing workers as independent contractors when they should be classified as employees.
This error can lead to significant legal and financial consequences as it affects the rights and benefits of the worker under labor laws, including wages, taxes, and protections like unemployment and workers’ compensation. Misclassification undermines worker protections and can result in penalties for employers, including fines, back pay, and legal liabilities.
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