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How could I tell if a new employer misclassified my position?

On Behalf of | Dec 10, 2021 | Employee Classification

When you start a new job, your employer must retrieve a certain amount of personal information about you. As described by the IRS, new hires need to complete a W-4 form so employers know how much tax to withhold from their paychecks.

To add you to a company’s payroll, your employer needs to first identify your tax filing status. This shows whether you file as single or married and if you need to list any dependents. You also need to provide your social security number or individual taxpayer identification number. These procedures generally show that the employer considers you an employee and not an independent contractor.

How could I end up working as an independent contractor?

If your employer did not ask you to fill out the traditional new hire tax forms, you may have instead started working as an independent contractor. As noted on the U.S. Department of Labor’s website, the law may also recognize you as an independent contractor if an employer pays you in cash.

By working “off-the-books” on a cash basis, you may have taken on the responsibility to pay your own employment taxes. Cash pay may classify you as an independent contractor rather than an employee.

Does receiving a 1099 form verify my status as a contractor?

At the end of the year, a company may send you a 1099 tax form if you performed services as an independent contractor. This form reflects how the company chose to classify your services for its tax reporting purposes.

Employers may hire workers and then misclassify them for their income tax reporting purposes. Based on the Federal Labor Standards Act, however, the degree of control the company exercised over your work performance may establish you as an employee rather than an independent contractor.

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