Sandra was a talented marketing consultant who took pride in her work. When she landed a gig with a well-known media agency, she was thrilled. The company classified her as an independent contractor, and Sandra agreed because the flexibility suited her at first. However, the job soon consumed most of her time.

For over two years, Sandra worked exclusively for the agency. She attended weekly team meetings, followed company policies, and adhered to set hours. She even used the agency’s email and software to communicate with clients. Despite this, Sandra didn’t receive any employee benefits—no health insurance, no paid leave, and no unemployment insurance.

When the agency abruptly ended her contract during a cost-cutting initiative, Sandra was left with no income and no safety net. Frustrated, she consulted an attorney, who advised her to file a lawsuit for misclassification.

During the court proceedings, the evidence painted a clear picture: Sandra had been treated like an employee in every way except in name. The agency controlled her work, and she had little independence in how she performed her duties. The judge ruled in Sandra’s favor, ordering the company to pay retroactive benefits, unpaid overtime, and compensation for her legal fees.

The ruling also prompted the Department of Labor to investigate the agency’s classification practices. This led to additional fines and penalties for the company, as other workers came forward with similar claims.

Sandra’s story highlights a critical risk of misclassifying workers: even if the arrangement appears mutually beneficial at first, it can lead to costly legal battles and regulatory scrutiny if the worker’s role doesn’t meet the criteria for an independent contractor.

If you are looking for an HR Audit for your business where we can point out potential misclassification issues and help you protect your business, then contact us at info@wpihr.com or fill out our contact us form and we will get back to you within 24 hours.