What Damages Can I Recover If I’ve Been Misclassified?

At Miller Shah, we believe correct employee classification is fundamental to securing workplace rights and protections. Proper classification as an employee or an independent contractor determines access to wages, benefits, and legal safeguards. Misclassification occurs when workers are inaccurately labeled as independent contractors, often denying them the rights they are legally entitled to as employees. For those affected, the financial and emotional consequences can be significant.

Understanding the damages you can recover for suffering misclassification is an important step in protecting your rights and securing fair treatment.  Some of the most common types of damages an employee who has been misclassified may recover are discussed below. 

Potential Damages for Misclassified Employees

If you believe you’ve been misclassified, you may be entitled to recover a wide array of damages. These damages can address losses you’ve experienced and hold your employer accountable for their actions. Some of the key categories of compensation that may be available to you include: 

1. Unpaid Wages and Overtime Compensation

Misclassified employees are often denied wages they have rightfully earned, including overtime pay. Employees are entitled to minimum wage and additional compensation for hours worked beyond 40 in a week under the Fair Labor Standards Act (FLSA). If you’ve been wrongly classified as an independent contractor, you can seek repayment for these unpaid wages and overtime. 

2. Restitution for Denied Benefits

Misclassified employees are frequently excluded from receiving essential benefits such as health insurance, retirement plans, vacation time, and paid leave. Employers who violate labor laws by misclassifying workers may be required to restore these benefits retroactively. This can include reimbursing medical expenses or providing compensation equivalent to the value of the denied benefits. 

3. Tax Penalties and Reimbursements

When misclassified as an independent contractor, you may have shouldered the full burden of Social Security and Medicare taxes, typically shared by employers and employees. If misclassification is proven, you may be eligible for tax reimbursements or to shift those costs back to your employer. 

4. Compensation for Reputational Damage

Misclassification can negatively impact a worker’s professional reputation, especially if it results in financial strain or limited future employment opportunities. Courts may recognize and award damages for the harm this misclassification has caused to your livelihood and standing in the workplace. 

5. Lawsuit Settlements and Legal Penalties

Misclassification often results in legal action against employers. Workers who bring lawsuits may recover damages in the form of settlements or court-ordered compensation. Employers may also face penalties per instance of misclassification, especially when intentional wrongdoing is uncovered. These penalties signify the severity of their actions and can lead to further monetary awards for affected employees. 

Take Action with Miller Shah

Misclassification is not just a technical error—it is an issue with tangible effects on your rights, wages and benefits. The team of skilled attorneys at Miller Shah is dedicated to fighting for workers who have been misclassified. We hold employers accountable and help individuals recover the damages they deserve. If you suspect you’ve been wrongly classified, don’t hesitate to take the next step. Contact Miller Shah today to discuss your case and explore your options.