Independent Contractor? Lost Your Job? Hurt On The Job?

I have heard of cases where independent contractors (ICs) have talked to state unemployment compensation or workers’ compensation agencies about their employment. These agencies have looked to how they were treated in the workplace and in some cases they were re-classified as employees and made eligible for unemployment compensation or workers’ compensation. State and federal agencies — particularly the IRS — want to see as many workers as possible classified as employees, not independent contractors. The reason is financial: The more workers are classified as employees, the more tax and insurance money flows into government coffers, and the harder it is for workers to under-report or hide their income from the tax man.

A state agency audit could re-classify an independent contractor as an employee and thereby made eligible for state benefits. A person can also ask the IRS for a review of their employment status. You could be re-classified as an employee by the Government.