Misclassifying Employees Case Study

Many small business owners simply can’t afford to pay for part of insurance so they are forced to find a way out. Some businesses have cut employee hours and fired workers. This way, they don’t have to pay employee benefits. Others have decided that it is more cost effective to pay the fine for not insuring employees than it is to pay for employee insurance.

The other requirement is a $3,000 dollar penalty to any larger employer’s employee who gets premium tax credits from the exchange, when the employer does not offer coverage that is affordable and sufficient. The reason for an employer mandate stems from the fact that 55% of Americans receive insurance as an employee at the company they work for, and 90% of them hold private insurance. Congress wanted to enact the mandate to have employers offer insurance coverage to their employees. Their goal was to deter companies from pushing employees to the individual market in which the government would have to pay for their insurance through federal tax credits.1

The employer-based insurance coverage eliminates cost assistance by the employers to the low wage employees which are disadvantageous and to counter this, the employers will avoid marketplace

The undocumented workers gained this protection from being discriminated and intimidated by their employer. The act of the petitioner reporting the workers to the IRA was indeed discrimination as no employer can hire or fire an employee at any time based off their involvement and participation with a union nor can they discourage membership or activity in any union making the petitioner guilty of constructive discharge. The purpose of reinstating the workers was to lessen the incentive for hiring undocumented workers by offering back-pay of six months and a reinstatement of work. Although reinstatement and back pay would deter unfair labor practices and treatment against undocumented employees as well as offer a relief for mistreated employees,

I did my research utilizing the wonderful tool of google. My first article was about a Valley Hotel owner. He violated the FLSA by “failing to pay overtime and record keeping” (January 23, 2017). The hotel owner failed to keep records of the overtime of the workers and paid the workers below the minimum wage. The owner should have kept a record of the overtime sheets of the workers but failed to do so. In 2013, the owner made an agreement to pay $30,816 in back pay which is owed to 11 former employees. (January 23, 2017) The owner did not follow the agreement and pay the workers the earnings due. The article failed to mention the owner also violated the FLSA by not paying their workers minimum wage. I find it shocking that a company would

According to Nonprofit Risk Management Center (n.d.), “negligent hiring will allege that if the employer had engaged in more due diligence when screening the worker, a history of similar conduct would have been revealed which should have disqualified the worker from consideration”. With this being said, my current employer was guilty of negligent hiring, however there was never a claim alleging it.

It is highly unlikely that large employers will try to reduce health insurance costs by converting employees to contractors, as misclassifying employees as independent contractors can incur major penalties. The IRS has very specific guidelines regarding who can be considered an independent contractor. The IRS has also been cracking down on the misclassification of independent contractors.

From the ABA Journal, I found an article about an injustice to workers because they are being mis-classified. A lawyer Justin Swartz is bringing federal class actions against adult entertainment establishments because of the violation against federal and state labor laws. The owners are classifying the performers, as “independent contractors” to which violates Fair Labor Standards. The clubs are avoiding minimum wages and overtime pay but charges the performers a “house fee” which goes directly to the club for their cut before the dancers receive their pay. Some might not approve of the line of work, or the establishments, but it is still a business with an employer and employees. To date Swartz, has settled with five New York clubs and putting

I spoke with the claimant and explained to him when to file his claim once he has been laid off. I was able to pay him for the week he was off due to the fact that he used to be on our partial system, in which the employers filed and certified for the employees, and had never filed a claim for himself before. I advised him that next time he would need to file during the week he was laid off or we would not be able to back-date his certifications. I closed the escalation tickets. Please let me know if you need any other assistance.

One of my former companies that I worked for Texas Instrument (TI) is a global Fortune 500 Technology Company and considered ethical and social responsible in their business practices. TI started out as a small oil and gas company in 1930, and then focused on defense systems electronics in the late 1940s. Jack Kilby invents the integrated circuit in 1958 which revolutionizing the semi-conductor industry and paving the way for all modern electronics (Texas Instrument, 2015).

Professional contractors understand this, and that they can typically send someone on their payroll with the smallest amount expertise and gets paid but their passed through crewman. This is often done as a result of they require the passed through crewman for the lot of difficult jobs. This protects the corporate cash, except for some reason; they do not pass the savings onto you.

rights when their contracts have been violated. Employers are able to hire and take advantage of

The Contingent worker, gig economy, contract workers, or freelancers are the new names of workers in this day and time all though the idea and workers have been around for a while. Although employees are sometimes threatened by the temp workers, they can bring vital skills and lower cost to the company that chooses to use them. I’ve personally been hired as a contracted worker through a temp agency to help companies either to deal with mounds of paperwork that needed organizing, just to answer the phones to free up time for the top executives and to help a major furniture company get through back orders and troubleshooting issues. Unfortunately, the downside to the contingent work is that there are instances where an individual is told that

Independent contractors receive a tax benefit because state and federal taxes are not withheld from their check. Independent contractors determine their own economic fate. They determine the amount of hours in a work day and which days of the week they work. The final payment depends upon the quality of work produced. However, a lack of job stability comes with being an independent contractor. If there is not a large demand for the type of services the independent contractor provides, the contractor will not get paid. Typically accountants are busy during the tax season, but if the accountant does not have another source of income coming in to offset the tax season the business is in trouble. There are more risks that come with keeping the business thriving as an independent contractor than an

It is estimated 10 to 30 percent of businesses within the U.S. misclassify employees (Miller.2014). As misclassifying employees can have serious legal ramification and can be costly for the employer, it is important to classify employees properly. For example, Einstein Brothers Bagels paid a settlement of approximately $500,000 to 424 assistant managers across the U.S. for their classification error (Tips for Determining Exempt Worker Status. 2002). This case proved that classifying an employee as an assistant manager does not make the employee exempt. Several conditions must be met in order before the employee can truly be exempt. As it relates to this case, there is not enough information provided to offer a good assessment on whether or