The typical penalty for an employer that misclassifies an employee as an independent contractor is a fine of up to $5,000.

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The penalty for misclassifying an employee as an independent contractor varies depending on the state and the severity of the violation. Fines can range from a few hundred dollars to thousands of dollars, and in some cases, the employer may be required to pay back wages, taxes, and other benefits that were denied to the misclassified employee.

The Typical Penalty for an Employer That Misclassifies an Employee