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When workers are misclassified, everyone loses

Proper Worker Classification is important. It determines an employer's legal obligations for:

  • Unemployment Insurance
  • Wage Payments
  • Civil Rights Protections
  • Worker's Compensation
  • Work Hours
  • Paying Social Security and Medicare Taxes

Who Am I?

Employer

Classification Information for Employers
 

Worker

Classification Information for Workers

Misclassification FAQ

Worker misclassification occurs when an employer treats individuals as independent contractors when they are employees. Under the law, workers are presumed to be employees unless the employer proves that workers meet the legal criteria to be independent contractors.

EMPLOYEES who are misclassified as independent contractors:

  • May not be eligible for unemployment benefits
  • May not be covered under worker's compensation
  • May not be protected under wage and hour laws
  • May not be protected under civil rights laws
  • May not be protected under the Family and Medical Leave Act (FMLA)
  • Are paying both the employer and employee share of social security and Medicare taxes

EMPLOYERS who misclassify workers as independent contractors avoid:

  • Unemployment insurance taxes
  • Withholding state and federal income taxes
  • Worker's compensation coverage
  • Paying social security taxes and Medicare taxes

EMPLOYERS who misclassify workers as independent contractors gain an unfair competitive advantage against other employers

DWD vigorously investigates misclassification, and when it's found, employers can face:

  • Taxes
  • Interest Charges
  • Civil Penalties
  • Possible Criminal Prosecution when warranted

Employers are required by law to correctly classify each worker as either an "employee" or "independent contractor.

Employers Can Help Prevent Misclassification

Classification Guidance

Home Unemployment Insurance Worker's Compensation Labor Standards Civil Rights
Employee or Independent Contractor: Why it Matters Empleado o Contratista Independiente: Porque es Importante
 

Other Resources

The Wisconsin Guide to Worker Misclassification La guía de Wisconsin sobre la clasificación incorrecta de los trabajadores 60-second Videos: Worker Classification Joint Enforcement Task Force on Payroll Fraud and Worker Misclassification
Report suspected worker misclassification Site Content Disclaimer Contact Us for Assistance