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Harm to employee morale from misclassifying an individual as an independent contractor rather than as an employee can far outweigh the savings in labor costs Howard S. Lavin and Elizabeth E. DiMichele 3 There often is confusion regarding when an individual may be classified as an independent contractor and when he or she is actually an employee. In addition, because many employers do not fully understand the risk associated with misclassifying such individuals, they view the distinction a.

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