A class of 847 current and former delivery drivers filed an independent contractor misclassification lawsuit against a large delivery and installation organization whose clients include Home Depot, Lowe's, Macy's, and Ethan Allen.
The plaintiffs allege they should not have been classified as independent contractors. As a result, the employer violated the law by not paying them minimum wage and overtime, not reimbursing them for business expenses, and not providing them other benefits given to employees.
The employer agreed to pay $16.5 million to settle the class action lawsuit. The average payment to each class member is $14,222.92. "$16.5 million settlement in IC case by logistics firm" www2.staffingindustry.com (Jul. 08, 2019).
The U.S. Department of Labor (DOL) and the IRS have an initiative to work together to stop misclassification, which results in less tax revenue.
The DOL starts with the assumption that all works are employees, unless they can meet the requirements for being considered an independent contractor. https://www.dol.gov/agencies/whd/flsa/misclassification Also see the IRS' definition: https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined
If the worker is autonomous, is invested in his or her own business, has opportunities for profit or loss, and has other clients, that suggests that independent contractor status may be appropriate. However, if the so-called "contractor" is necessary for your business operations, has a "permanent" position with you, and has a working relationship that looks a lot like an employee's or is engaged in performing duties another employee also performs, then the individual is likely misclassified.
Consult with your legal counsel before designating workers as independent contractors, even if the worker requests being designated as such.