Miscategorizing Employees

A tweet I forwarded today reminded me of a problem I had a couple of years ago. The tweet was from Jobs With Justice:

I was laid off in October of 2008 from a company called Indigo Design. (Since that time, the owner underwent a nervous breakdown and the company is out of business). I had only worked there for six months, but prior to that had worked for another company long enough to qualify for unemployment benefits.

I applied for unemployment, accurately stating my most recent employer and the cause for my leaving, which was “lack of work”. Shortly afterwards I received the following email:


(You may notice that the Subject header is “Letter of Recommendation”. I wrote to him shortly after I was let go, requesting a letter of recommendation. I waited until I got it before submitting my unemployment claim, since I didn’t think I’d get one from him if he knew I was filing.)

I didn’t call him because I saw no reason to, and because I didn’t want to have to explain that the claim wasn’t against Indigo Design, but with New York State. Withdrawing my claim would put me in the position of not collecting what was owed me due to my previous work!

Anyway, a while later I received a letter from the Department of Labor stating that my claim was under review and that payments would be suspended until the time of its resolution. The reason was that my most recent employer stated that I was terminated for “lateness”, and not because of lack of work.

Unfortunately, the DOL was swamped with new claims, as it was the beginning of the mini-Depression, and employers were challenging these claims in record numbers. This went on for months, and finally I received their decision: they were accepting Indigo Design’s claim that I had been a contractor. As a result, my weekly check was $102 less than it would have been, but at least I was finally getting something.

Around this time I also received from the DOL a questionnaire to determine if I had actually been a contractor. I looked at it and could see that if I answered every question accurately, it would demonstrate beyond all doubt that I had been an employee and not a contractor. I didn’t fill it out and send it back because I knew if I did it would result in my claim being frozen again, and I had already gone for too long without money. I saved it though, with the intention of waiting until I had exhausted my benefits, and then sending it in. By that time, though, the owner had gone mad and the company was out of business, putting another half dozen or so people into the same position I had been in.

So, what is the lesson to be drawn by this? Don’t wait until you file for unemployment to challenge your boss’s misclassification of you. Take a look at the IRS page describing employees vs. contractors, and fill out the PDF if you think you’ve been misclassified.