Worker classification exposure is systemic: one misclassified role is every person in it, over the limitation period, with taxes, benefits and penalties.
Scope. Independent contractors, exempt classifications, interns and volunteers, and workers supplied through agencies. Each has a different test and a different exposure profile.
Under privilege. Conducted at counsel’s direction so that the analysis and any adverse findings receive protection while remediation is planned.
Method. Inventory the population; gather the contracts, job descriptions and pay records; interview managers and a sample of workers about how the work is actually performed; and apply each applicable test — federal wage, tax, state wage, unemployment, workers compensation.
Prioritise by exposure. Number of workers, hours worked, duration, and whether the state uses a strict test.
Remediation options. Reclassify prospectively; restructure the relationship so the classification is defensible; use a staffing intermediary; or address the past through voluntary programmes where available.
Communication. Reclassification announcements prompt questions about back pay. Prepare the message, the timing and the treatment of the prior period before announcing, because an unplanned announcement is itself the trigger for claims.
Documentation. Retain the analysis supporting each defensible classification; it is the evidence of good faith that limits liquidated damages and penalties.