Misclassification often occurs when a Texas employer classifies an employee as an independent contractor as opposed to an employee. In some instances, a business may do this inadvertently; however, it is important to keep in mind companies receive many benefits when they classify employees as independent contractors. Employers may misclassify employees as independent contractors to avoid payroll taxes and benefits, and to circumvent wage and hour laws. If an employer misclassifies an employee, the employee can file a status request by submitting IRS Form SS-8 with the IRS. Employers are prohibited from retaliating against employees because they filed this form.
Generally, the IRS will only allow a request from an employer or employee to determine employment taxes and withholdings. It is essential that Texas employees appropriately and accurately complete the form and provide all required information. Some critical information includes how the employee obtained the position. Specifically, the IRS needs to know whether the job was through an employment agency, general application, or a bid. Further, the employee should provide detailed information about their job duties and the work they performed. The employee must provide a thorough explanation regarding why they believe their categorization is incorrect. The IRS will also review any written agreements or contracts.
The IRS will determine whether the employer had behavioral and financial control over the worker, and what their relationship entailed. The IRS will also evaluate training, assignments, problems, routines, and roles of other workers. Further, it will consider who provides equipment and reimbursements. Financial control determinations also include examining the type of pay, who pays the worker, and what the economic risks are. Finally, the IRS will investigate benefits, penalties, non-compete agreements, union agreements, and how the business represents its workers to the community.
The process can take up to six months from when the IRS receives the request. The process will ultimately result in either a determination decision or an informational letter. Employees should retain experienced employment attorneys to guide them through this process because determination decisions are binding. Once you are correctly classified, you may be entitled to specific remedies such as back pay and lost benefits.
Has Your Texas Employer Misclassified Your Employment Status?
If your employer has misclassified your employment status, you should contact an experienced employment lawyer at Rob Wiley P.C. In many cases, filing a form may seem straightforward; however, IRS Form SS-8 requires a significant amount of evidence. An attorney can assist you in gathering all of the relevant evidence and advocating on your behalf. Moreover, our Texas employment law attorneys can assist you if your employer retaliates against you because you filed the Form SS-8. Contact our law firm at 214-528-6500 to schedule a consultation.