The Cost of Worker Misclassification in Maryland

Worker misclassification is a widespread issue that affects thousands of employees across Maryland, depriving them of critical benefits and protections. Many workers who should be classified as employees are instead misclassified as independent contractors, often without their knowledge. This can result in lost wages, denied benefits, and reduced legal protections, making it harder for workers to access the rights they deserve.

Worker Misclassification in Maryland: What Employees & Employers Need to Know 

A recent examination by Maryland’s Joint Enforcement Task Force on Workplace Fraud (“Task Force”) reveals the alarming extent of worker misclassification in Maryland. The Task Force found that, in 2024 alone, more than 5,500 workers were wrongly classified as independent contractors rather than employees by their employers; estimates suggest that 11% of construction workers in the state are misclassified. 

Misclassification denies employees essential benefits such as workers’ compensation, unemployment insurance, and overtime pay. The Task Force 2024 annual report highlights the fact that worker misclassification shifts financial burdens onto employees, reducing their annual earnings by as much as $21,177 per worker in some industries. 

Recognizing and Responding to Employer Misclassification 

Worker misclassification is not always easy to identify. Employers may try to disguise misclassification by offering slightly higher pay in exchange for an independent contractor agreement or requiring workers to sign contracts that misrepresent their employment status. 

If you suspect that you are a misclassified worker, it is essential to document your claim. To do so, keep track of: 

• Work schedules and assignment; 

• Payroll records and payment methods; 

• Communications with supervisors regarding job duties; and 

• Copies of contracts or agreements (if applicable). 

Many misclassified workers don’t realize the impact of their employment status until they experience a workplace injury, job termination, or loss of benefits. Addressing misclassification early can help secure proper employment protections and prevent financial loss. 

Steps To Take If You’ve Been Misclassified 

If you believe you have been misclassified, there are several steps you can take to assert your rights and recover lost benefits. These include: 

• Filing a wage claim in Maryland to recover unpaid overtime, benefits, or other compensation; 

• Seeking workers’ compensation benefits if you were injured on the job; 

• Joining or initiating a class action lawsuit with other misclassified workers; 

• Reporting worker misclassification to the Maryland Department of Labor. 

Taking action against worker misclassification in Maryland is essential not only to recover what you are owed but also to prevent future violations and protect others from facing the same unfair treatment.