From CNBC, Annie Nova discusses how gig workers might be eligible for unemployment benefits, if they apply. One of the risks of misclassifying a worker as an independent contractor is that after the assignment or project is finished, the worker will apply for unemployment and the state will determine that s/he was an employee and not an independent contractor. Annie writes:
You’re an independent contractor (or so you thought)In order for your wages to count toward unemployment insurance, you need to be in an employee/employer relationship. The earnings of self-employed individuals and independent contractors, therefore, don’t count toward the benefit.
But many workers are misclassified as independent contractors, Wentworth said, and under the law they are actually employees.
It’ll be up to your state unemployment agency, using its laws, to determine if your status was independent contractor or employee.
“Frequently, a worker has been told they’re an independent contractor, and then the agency determines they’re an employee,” Wentworth said. “An auditor comes in and says, ‘We need to reclassify those as wages and you should be eligible for benefits.'”
Read the full story at Qualifying for unemployment insurance is easier than you think