Off the Books

What is Worker Misclassification?

When employees are working off the books, paid under the table in cash or improperly treated as independent contractors, they are considered misclassified workers.

Worker misclassification is bad business for workers and employers. Click on the accordion boxes below to find out how worker misclassification may affect you.

For Workers

Ensuring you are properly classified helps you get the benefits you are entitled to. Misclassified workers miss out on things like health insurance, unemployment benefits, workers' compensation coverage and employer tax contributions. Missouri law defines who is an employee and who is an independent contractor based on the relationship between the business and the person performing the work.

Missouri uses the IRS 20-factor test as a guide in determining if a worker is an employee of a business. Generally speaking, giving a worker direction on when, how and where to complete work; paying by the hour, week or month; reimbursing for business and travel expenses; performing work on the business's premises or having a continuing relationship between the worker and the employee all may point to a worker being an employee under the law.

Think you may be a misclassified worker? Take this assessment to find out more.

To report a business for suspected worker misclassification, use our online form or  call 573-751-1099.

For Employers

The majority of Missouri businesses take care to properly classify their workers. These employers foster good working relationships with employees and competitors and avoid costly penalties.

Missouri law defines what constitutes an employee versus an independent contractor. Missouri uses the IRS 20-factor test as a guide in determining if a worker is an employee of a business. Generally speaking, giving a worker direction on when, how and where to complete work; paying by the hour, week or month; reimbursing for business and travel expenses; performing work on the business's premises or having a continuing relationship between the worker and the employee all may point to a worker being an employee under the law.

We want to help you properly classify your workers. If you have questions, you can sign up today for one of our trainings on misclassified workers or take this online assessment to see if you are properly classifying your workers.

Failing to properly classify your workers could put your profits and business at risk. Employers who improperly classify their workers face penalties of $50 to $1,000 per day per worker. They could also serve up to six months in jail per violation. In addition, the employer may be liable for unemployment taxes on that employee, and the DES may assess a penalty of up to 25 percent of the amount the state is defrauded. Failing to provided workers' compensation insurance is also illegal, and may incur additional criminal charges and fines.

Don't put your business at risk. Make sure your employees are getting the benefits they deserve. Contact us today at 573-751-1099 if you need assistance properly classifying your workers.