What’s the big deal about employee misclassification?

A warning about trucking companies who intentionally classify drivers as independent contractors.

A growing problem in the trucking industry is “employee misclassification.” This is when a company deliberately calls its drivers independent contractors. They are paid wages with a 1099 and required to purchase occupational accident policies that are mostly inadequate. Some drivers are even told to create their own separate companies as a legal fiction.

Michigan law is very specific on the distinction between employees and independent contractors. Services are considered employment if performed by an individual whom the Michigan Administrative Hearing System determines to be in an employer-employee relationship using the 20-factor test in IRS revenue ruling 87-41.

By deliberately misclassifying employees as independent contractors, trucking companies avoid having to purchase required workers’ compensation insurance. This has a real human cost when drivers get hurt and cannot pay medical bills or support their families.

Truck drivers who are hurt on-the-job don’t simply disappear because there is no workers’ compensation insurance. Group health insurance, auto no-fault, Medicaid, and Medicare must pick-up the tab. This ends up increasing insurance premiums and taxes for everyone.

Employee misclassification is extremely short sighted as workers’ compensation insurance is relativity cheap and designed to protect both the employee and the employer in the event of a work-related accident. Limited benefits are paid in the form of medical and wage loss. In exchange, the employer gets protection from civil lawsuits.

A trucking company who fails to purchase workers’ compensation insurance is not automatically off the hook. Payment of workers’ compensation benefits is still required. Officers and directors of the company can be found personally liable for payment.

The trucking company also loses the protection of the exclusive remedy provision and can be sued for its negligence. This would open the door to additional damages such as pain and suffering. Reckless employers who put their employee’s lives in danger can be held accountable.

It is important to evaluate all potential claims after a serious truck accident. Speaking with an experienced attorney is the best way to ensure all legal rights are protected.

Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (855) 221-2667 for a free consultation today.

Related information:

Injured Trucker Deals With Reality of Workers Comp

Photo courtesy of Creative Commons, by Brickset.

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