Worker Classification & Employment Tax

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Misclassification of workers as independent contractors can present significant liability risks. Although federal and state agencies have, at times, been relatively tolerant of independent contractor classifications, in recent years these classifications have been under attack through a slew of federal and state laws and initiatives.

Businesses—and certain business owners, officers, and employees—that are accused of misclassifying employees as independent contractors can face liability for unpaid taxes and penalties (e.g., federal and state income tax withholding, FICA, FUTA, SUTA), workers compensation- and disability insurance-related penalties, wage and hour-related liability (e.g., failure to pay a misclassified worker minimum wage and overtime), employee benefit plan risks (e.g., misclassified workers may be entitled to benefits under various employee benefit plans), and in certain cases, criminal liability.

Given the potential scope and significance of the liability associated with misclassification, responding to and developing solutions for issues relating to the classification of workers requires a deep understanding of many different substantive areas of law, including federal and state tax law, wage and hour law, workers compensation and disability law, employee benefits law, and criminal law. Our multidisciplinary Worker Classification & Employment Tax Practice Group includes attorneys with extensive experience in all of these areas.

To help ensure our clients are well protected, our attorneys work proactively to identify potential misclassification issues and help create defensible independent contractor classifications where desirable and appropriate. And when claims, audits, or investigations arise, the attorneys in our Worker Classification & Employment Tax Practice Group have extensive experience in developing solutions to avoid or minimize exposure and, when necessary, litigating such matters before the federal and state courts, departments of labor, workers compensation boards, and taxing authorities.

The attorneys in our Worker Classification & Employment Tax Practice Group have represented hundreds of clients of all sizes, from small start-ups and nonprofit organizations to major multinational corporations, in connection with worker classification matters. And our attorneys have successfully litigated worker classification matters of all sizes, ranging from cases involving a single worker to those implicating the classification of thousands. In all cases, we work with our clients to develop a holistic approach that makes business sense and takes into account the wide array of legal consequences associated with worker classification decisions.