Misclassification
Treating a worker or job as the wrong legal or rating category, such as labeling an employee an independent contractor to avoid required workers' compensation.
In the owner-exemption context, the highest-risk form of misclassification is treating a worker as an independent contractor or exempt owner when the law treats that person as an employee. Misclassification can affect coverage, premium, penalties, and claim responsibility.
California's Department of Industrial Relations states that improper employee-to-independent-contractor classification can leave workers without workers' compensation protection and is a form of fraud. Classification can also refer to assigning the wrong workers' compensation class code, which is a separate premium-rating issue.
Where this definition comes from
Glossary entries are anchored to a state agency, statute, board, commission, or recognized workers' compensation authority rather than a generalized summary.
More terms
- Additional insured
- Agricultural/farm labor exclusion
- Assigned risk pool / residual market
- Casual employment
- CE-200 (New York)
- Certificate holder
- Certificate of election
- Certificate of insurance (COI)
- Civil penalty (uninsured employer)
- Class code
- Competitive state fund
- Construction vs non-construction classification