Employee misclassification

[ILLMAS]

Has anyone ever been involved in an employee vs independent contractor state audit?  If yes, what were the consequences of treating an employee as a independent contractor?

Thanks

[Lion EA]

Only heard the stories. For CT, the phrase most often used is the Audit from H%!L.

[Lee B]

Yes, underpayment of SUT, Workers Compensation Insurance Premiums & other state and local taxes plus penalties and interest.

[Max W]

This is a huge issue in CA. The state legislature passed a law defining Uber and Lyft as employees, as well as some other SE's.   In 2020, Proposition 22, a voter initiated measure, was passed, overwhemlingly with 58% of the vote, defining Uber, Lyft and other Ind. contractors as self-employed.

The state contested it and a Superior Court (county) judge found Prop 22 to be unconstitutional.  The case is being appealed.

In CA, voter initiated measures can be introduced and placed on the ballot if the requisite number of signatures are collected.  If the majority votes in favor of the measure it becomes law, bypassing the state legislature. 

[Lee B]

Yeah, Uber, Lyft and other gig tech high flyers spent Millions and Millions of dollars on misleading ads getting that passed.

Money gives you power