As recently reported by The Guardian, the iconic sneaker brand Nike may be liable for over $530 million dollars in taxes and fines for misclassifying its temporary office workers as independent contractors. Nike’s purported misclassification of temporary office workers includes – but is not limited to — people hired by Nike to do business consulting, T-shirt graphics, photography and event planning.
In addition to avoiding taxes, companies like Nike may classify workers as independent contractors to evade billions in overtime, paid time off, restricted stock options, retirement plan contributions and healthcare. Thus, a finding that temporary office workers are actually employees and not independent contractors raises a separate and equally important issue: did Nike pay these temporary office workers overtime wages for the hours they worked over 40 in a work week? The answer to the question undoubtedly is “no.” Because it classified these temporary office workers as independent contractors, then Nike could use that independent contractor classification to wrongfully withhold overtime wages and benefits.
According to The Guardian, a report on Nike’s classification of temporary office workers warns “Employers who are found to have misclassified workers as freelancers are also potentially liable for other potential costs,” including unpaid overtime, among other things. In addition, the report also notes that Nike could be subject to class-action lawsuits for unpaid overtime and other benefits.
Shavitz Law Group handles lawsuits where companies misclassify workers as independent contractors. If Nike – or another company – misclassified you or someone you know as an independent contractor contact Shavitz Law Group to learn more about your legal rights.