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Category Archives: Misclassification

January 27

Understanding Employee Misclassification vs Proper Classification

Understanding Employee Misclassification Businesses are required to determine whether individuals providing services are employees or independent contractors. The distinction sometimes can be confusing, and employee misclassification can have serious consequences for both workers and employers. [embed]https://youtu.be/1-ZC9G2zcG0[/embed] What’s the difference between an employee and an independent contractor? The Fair Labor Standards Act (FLSA) sets guidelines for detecting misclassification. Generally, one is an independent contractor if the worker is free from control or direction of the services involved, and if the worker is…

January 06

Misclassification, Employment

$19.4 Million Lyft Settlement Signals Strengthened Worker Misclassification Enforcement in New Jersey

In September 2025, the New Jersey Department of Labor & Workforce Development (NJDOL) announced that rideshare mogul Lyft had submitted over $19.4 million to the state’s unemployment, temporary disability, family leave insurance trust funds, and workforce development funds after an audit found that the company had misclassified over 100,000 drivers between 2014 and 2017 as independent contractors rather than employees. By treating these workers as independent contractors, Lyft avoided required state payroll tax and benefit contributions, including unemployment compensation, temporary disability and family leave benefits. Consequently, drivers…

December 16

Employment, Misclassification

Why the IRS’s $20,000 Reporting Threshold Still Leaves Misclassified Workers at Risk

Why the IRS announcement Raises Concerns Over Gig Worker Misclassification The IRS Fact Sheet 2025-08 reflects the Agency’s decision maintaining the Form 1099-k reporting threshold at $20,000 and 200 transactions for 2025. While the decision reduces confusion for many online sellers and hobbyists, it creates a blind spot for many gig workers. Gig worker misclassification as independent contractors rather than employees shift tax burdens, reporting duties, and legal responsibilities on to individuals rather than employers. A higher 1099-K threshold may reduce paperwork for some taxpayers, but it also reduces transparency, allowing employment misclassification…

December 04

Employment, Misclassification

California Secures $10 Million Settlement Over Home-Care Worker Misclassification

Misclassification Allegations In a recent enforcement action by the California Department of Justice, the state secured a judgment of over $10 million against Care Specialist HCS Inc. (formerly TLC Home Care Services), and its previous and current owner-operators, for the alleged misclassification of hundreds of in-home care workers as independent contractors in violation of California’s labor laws and Unfair Competition Law. The 2023 lawsuit alleged that the company mislabeled these…

November 03

Misclassification, Employment

1099 vs W-2 for Telehealth Providers: What’s the Difference?

As telehealth companies continue to grow, many physicians and clinicians are classified as 1099 independent contractors—but under federal and state law, they may qualify as W-2 employees. Understanding the difference between these classifications is critical, as it impacts everything from overtime pay and benefits to tax obligations and legal protections. DOL’s Six Economic Reality Factors Many factors can distinguish the status of 1099 and W-2 telehealth providers. Under federal law, treating a W-2 employee as an independent contractor is considered…

October 27

Employment, Misclassification

California Gig Worker Misclassification Back in Spotlight With New Legislation

[embed]https://youtu.be/Gg9iwJFtK3Q[/embed] What does the new legislation propose, and how does it affect California gig worker misclassification debates under AB5 and Prop 22? California’s Assembly Bill (AB) 1340 and Senate Bill (SB) 371 together are a monumental legislative package that strengthens the labor protections of gig workers. The bills operate within the framework established by Proposition 22, which, passed in 2020, classifies rideshare drivers as independent contractors. This designation precludes them from protections granted to employees, most notably, the right to organize. Supported by both labor unions and rideshare companies, the new legislation aims to grant drivers new protections while largely…

September 15

Misclassification, Employment

Perdue Misclassification Lawsuit Advances as Judge Allows Collective Claims to Remain

On June 27, 2025, Maryland federal judge J. Mark Coulson denied Perdue Foods' motion to dismiss the claims of seven growers who accused the poultry company of violating the Fair Labor Standards Act (the “FLSA”) by depriving workers of minimum and overtime wages. What Is the Fair Labor Standards Act (FLSA)? The FLSA, which distinguishes nonexempt employees from independent contractors, establishes minimum wage, overtime pay, recordkeeping, and other employment standards…

September 11

Misclassification

Fourth Circuit Upholds $9M Ruling in Nurse Misclassification Case

In a 2-1 decision on Thursday, July 17, 2025, the Fourth Circuit upheld a $9 million judgment against the medical staffing firm Steadfast Medical Staffing (“Steadfast”) for misclassifying more than 1,100 travel nurses as independent contractors, denying them benefits such as overtime pay as a result. The lawsuit is the result of a 2017 investigation by the Department of Labor (“DOL”) which concluded that the nurses should have been classified…

September 10

Whistleblowers, Misclassification

Top 5 Signs that You are a Misclassified Telehealth Contractor

The global telehealth is valued at over $83 billion in 2023 with an expected annual compounding growth rate of 24 percent through 2030, making it one of the largest and fastest growing technology industries in the world. However, with rapid growth comes the possibility of predatory and exploitative business practices. Many telehealth physicians, therapists, and nurse practitioners are classified as independent contractors—but under federal and state law, they may legally…

August 14

Misclassification, Employment

Are Telehealth Physicians Being Misclassified as Independent Contractors? Key Warning Signs for Virtual Care Providers

Expansion of Telehealth Services and Worker Misclassification Risks Since the COVID-19 pandemic, telehealth services expanded nationwide, allowing patients to receive care at reduced costs and allowing providers the ability to use digital platforms to efficiently address the needs of more patients. The rise of telehealth has transformed healthcare delivery, but it has also introduced new risks of worker misclassification. Many telehealth physicians may be improperly classified as independent contractors when…

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