Worker Classification

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What is Worker Misclassification?

Worker misclassification is the unlawful practice of labeling employees as independent contractors. Misclassification is cheating because it allows employers to avoid paying benefits (health and retirement), liability insurance, unemployment insurance, and withhold taxes.

Why is misclassification bad?

Misclassified employees are often denied access to critical benefits and protections they are entitled to by law, including minimum wage, overtime compensation, family and medical leave, and unemployment insurance.

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Is a Worker an "Employee" or an "Independent Contractor"?

Employers are required by law to correctly classify each worker as either an "employee" or "independent contractor." Visit the Classification Determination page to determine if you are an employee or independent contractor.

What happens when an employer misclassifies?

It is important for employers to correctly classify their workers. Worker classification determines whether or not the employer has legal obligations under the law for unemployment insurance, worker's compensation, wage payments, work hours, record keeping and civil rights protections. There are consequences for misclassifying or attempting to misclassify a worker as an independent contractor.

DWD vigorously investigates misclassification, and when it's found, DWD imposes:

  • TAX,
  • INTEREST,
  • PENALTIES, and/or
  • CRIMINAL PROSECUTION when warranted.

Steps to Classify a Worker

This website will guide you through Wisconsin’s worker classification laws. Select the appropriate law(s) to begin the process to evaluate how to correctly classify a worker as either an employee or independent contractor:

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Report suspected worker misclassification