One of the most-frequently encountered cheating schemes is misclassifying employees as independent contractors. By cheating like this companies gain the following advantages:
- they can get out of paying the minimum wage
- they can get out of paying any overtime
- they can get out of providing workers compensation insurance
- they can get out of paying unemployment compensation premiums
- they can get out of paying payroll taxes
All of these add up to significant competitive advantages for cheating companies. The Lexington Herald-Leader reports on these practices: Taxpayers and Workers Gouged by Labor Law Dodge.
