A 1099 misclassification lawsuit is filed by an individual who believes he or she has been wrongfully classified as a freelancer, independent contractor, or an employee. By filing the suit, the individual is asking to be reclassified as an employee. His or her classification as an independent contractor may have allowed him access to company resources, benefits and possibly a job. However, his or her classification as an independent contractor has been improperly created. A misclassification lawsuit is similar to a fraud lawsuit. In these types of lawsuits, the plaintiff claims that the defendant acted with intent to deceive the individual into hiring or working with them, in violation of federal and state laws.
1099 Misclassification Lawsuit
An example of a 1099 misclassification lawsuit involves a carpet cleaner who accidentally injured an employee while vacuuming. Instead of reporting the injury to management, the cleaner concealed the injury. The employee subsequently filed a complaint against the company, charging that the company had retaliated against him for reporting the injury. The court found in favor of the employee and awarded him compensation for his pain and suffering. The ruling sparked public attention and eventually led to a tightening of regulations for how companies can handle misclassification cases.
Because many businesses classify their employees as independent contractors instead of hiring them, they are subject to the same misclassification lawsuit as any other contractor. If you have been deceived into thinking you are working for your employer when you are not, you should know your rights and how to file a lawsuit. There are several ways your employer can respond to a lawsuit. Depending on the nature of the company’s finances and the risk of losing a lawsuit, the employer might attempt to resolve the dispute in compromise or arbitration.
Another possible avenue for employers to handle a misclassification lawsuit is through arbitration. In this process, the parties negotiate a settlement outside of court. If the case does go to arbitration, you may be able to settle your case without going to trial and paying attorney fees.
If neither option works, or if you feel you may need more information about filing a lawsuit, you should contact an experienced employment attorney who specializes in this field. They will help you decide if your employer has engaged in practices that result in violations of the Fair Labor Standards Act. For example, you may have worked for your employer for years but have been wrongly classified as an independent contractor instead of being an employee. If you believe you have been wrongfully classified, you may also have a case for misclassification lawsuit. With an attorney’s help, you will have a much better chance of success.
If you decide to pursue a legal resolution to your misclassification issues, you may receive a settlement offer from your employer. Your settlement offer will outline the terms of your settlement. It will also provide information about how your attorney will be paid, what you should expect when you file the lawsuit, and other important information. Before accepting the settlement offer, you should research all of the terms and understand them. Only then should you move forward with filing a lawsuit.