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Classifying workers through chance of profit and/or loss

Posted on January 21, 2015 4:52 pm under Overtime Law and Minimum Wage Violations

Salaried workers in certain sectors, such as the adult entertainment industry, are at high risk of being misclassified as an independent contractor rather than an employee. The repercussion of this misclassification is huge, as it can disallow the worker from receiving overtime payments and other benefits they should be entitled to.

To prevent misclassification, the Wisconsin Department of Workforce Development has developed a worker classification test composed of several parts, including identifying the worker’s risk of profit or chance of loss. Workers who receive a regular wage and do not have a significant risk of economic loss are most likely employees. On the other hand, workers who may have to bear the risk of losing revenue when exposed to certain liabilities or when unable to go to work are more likely to be classified as independent contractors. Similarly, workers who earn more when working efficiently and for longer hours, or when acquiring new customers are probably independent contractors, as they are considered to operate their own self-employment business.

To learn more about the legal action you may take after being misclassified as an independent contractor, consult with a lawyer at Habush Habush & Rottier S.C. ® by calling or Milwaukee office at (414) 271-0900 today.