What is the implication of incorrectly classifying a worker as an independent contractor?

Incorrectly classifying a worker as an independent contractor has significant implications, particularly regarding eligibility for overtime pay and benefits. When a worker is misclassified as an independent contractor rather than an employee, they lose entitlement to key benefits afforded to employees under labor laws. This includes rights to overtime pay, which mandates that employees receive extra compensation for hours worked beyond the standard workweek. Employees are also entitled to various benefits such as healthcare, unemployment insurance, and retirement contributions, which independent contractors typically do not receive.

Therefore, the correct answer underscores the critical consequences of misclassification, impacting workers' financial security and overall rights in the workplace. Misclassification not only undermines the protections that labor laws are designed to afford but also subjects the employer to possible penalties and liabilities for failing to comply with these legal obligations, emphasizing the importance of proper classification in workforce management.