I was reading this in Wikipedia:
However, there is risk involved in avoiding these costs if an employee is improperly classified as a contingent worker.
What laws make this a risk?
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A simplistic way of telling an employee from a contingent worker is the relationship the business has with the worker. If the business is providing tools/equipment, telling the worker when and where to work, or telling the workers how to complete their work, or what to actually work on... then chances are the worker is an employee and not a contingent worker.
Contingent workers most often set their own hours, use their own tools, and complete their work according to their expertise, without any direct oversight. They are given tasks or projects from the business, but how and when those projects are completed is entirely up to the worker.
Essentially, some businesses may classify "employees" as "contingent workers" (Freelancers/Independent Contractors) in an effort to avoid paying for things like unemployment, healthcare, vacations, sick leave, etc.
If the business is discovered to be mis-classifying workers this way, they may be in violation of tax laws and could suffer tax penalties for claiming the mis-classification (and attempting to avoid "employee" fees).