Employer shall be very cautious about classifying an individual as independent contractor rather than an employee. If you are an independent contractor and suspect that you should have been treated as an employee, you are protected by Massachusetts law. If your employer violates Massachusetts wage and hour law by owing you wages and overtime pay, you can be awarded treble damage.
It is illegal for an employer to misclassify an individual as an independent contractor rather than an employee in order to avoid paying payroll tax, social security, worker’s compensation, unemployment benefit premium, and other benefits. The biggest common mistake is that employers think if they call an individual independent contractor, IRS will simply acknowledge this characterization. This is not the case. This is not about the label, but about the factors that determine the label.
Our employment law presumes an individual performs services as an employee unless the employer can overcome the presumption by meeting some requirements. The general test is the employer’s right to control and direct the individual’s work. An employer of an employee controls not only what the employee does, but also how he does his work. Independent contractor enjoys more freedom and less control from the employer as to the content and the manner he performs his work. Factors to consider include degree of control, employer’s right to discharge, employer’s delegation of work, hiring practice, training, place of work, duration of relationship, nature of the trade, intent of the parties.
Massachusetts’s employment law makes it difficult to classify an individual as independent contractor. Employer’s misclassification may cause serious violations of employment law, tax law, and benefit law. The Attorney General’s Office will prosecute the employer who violates this law. The punishment is fine, civil and even criminal liabilities. Depends on employer’s intent of violation and seriousness of the offense, the fine could be $10,000 to $50,000 and up to 2 years jail time. Not only the company, but an officer, agent or employee of the company may also be personally liable for the misclassification.
Moreover, if an employee files the complaint in the court and prevails on claims of wage and/or overtime pay owed by the employer, whether due to misclassification or not, court can award the plaintiff triple damage plus attorney’s fee and cost.
