What is employee misclassification?

Employee misclassification

Employee misclassification occurs when an employer incorrectly classifies an employee as an independent contractor. This practice is common, and it can have serious consequences for both employers and employees.

Risks of misclassification for employers

For employers, misclassifying employees can lead to significant fines and penalties in many countries. In addition, it can create a competitive disadvantage if other businesses are correctly classifying their workers.

Worried you've misclassified a contractor? Get answers using Oyster's Contractor vs. Full-Time Analyzer.

Risks of misclassification for individuals

For individuals, misclassification can result in reduced benefits, poorer working conditions, and reduced job security. As a result, it's important for both employers and employees to be aware of the risks of employee misclassification.

How to avoid employee misclassification

Check out our Employee Misclassification Analyzer for a quick assessment to properly classify employees and independent contractors in jurisdictions around the world and avoid the risk and legal complications of misclassification.

Reducing risk by converting contractors to employees

Hiring contractors may seem like a simple way to scale your team quickly. But, as outlined above, if a contractor actually operates like an employee, your company could be exposed to various legal, financial, and operational risks. 

Not to worry. Oyster’s contractor conversion solution can help you assess your risks in different countries, weigh the costs and benefits of both employment models, and compliantly transition contractors to full-time employment.

That’s right, with Oyster you can:

  • Get help from experts: Receive guidance and local knowledge on contractor conversion from our People Ops and legal teams. We’ve got your back.

  • Convert contractors easily: Manage the whole transition process and all stakeholders involved under one platform. Nothing gets lost or missed.

  • Manage a global team confidently: Access easy-to-use tools to explore any legal risks, as well as the costs of hiring contractors and employees.

  • Better care for your team: Use Oyster to provide payments in local currencies, health insurance, and benefits to wow and retain your talent.

Skip the stress of handling contractor conversion alone. Try Oyster’s global employment platform today.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, hire, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.

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