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Global Work Glossary

Lost in a maze of global employment jargon? Find your way out with our handy collection of work and HR terminology

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# A B C D E F G H I J L M N O P R S T U V W X Y Z

Disguised employment

What is disguised employment?

Disguised employment, also known as “disguised worker” or “false self-employment,” occurs when a worker is treated as a contractor or self-employed individual but should legally be classified as an employee. This can lead to issues related to tax and employment rights.

There are three major factors that mean someone is classed as an employee rather than an independent contractor or self-employed individual…These are how much control an employer has over when and where they work, whether they receive benefits like health insurance and paid time off, and whether the contract is long-term. It’s also important that each relationship is analyzed on a case-by-case basis as these factors are not exhaustive.

If employers fail to identify that workers are employees rather than independent contractors or people who are self-employed, this can lead to legal trouble. Employers are required to pay different tax rates, provide benefits, and comply with labor regulations and without doing so, they can face fines.

To stay on top of employee classification and avoid these issues, it’s best to use an HR service such as Multiplier. We undertake tests that consider every aspect of the relationship to ensure that all workers are managed and paid correctly.

You can make the most of a centralized payroll system by ensuring that all staff are properly trained, ensuring the systems’ data is backed up, and choosing software (such as Multiplier) that integrates with other HR solutions.

Ready to take the leap? Choose Multiplier as your EOR partner

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