Misclassification of workers engaged by a company as
"independent contracts" rather than "employees"
can be a very costly mistake for businesses. In the event of an
audit by the Revenue Commissioners, if it is considered that the
true nature of the relationship between the individuals engaged and
the business is an employment relationship, then the company
engaging the individuals will be held liable to account as employer
for PAYE, PRSI (including employer's PRSI (currently, 8.8% or
11.05% depending on annual earnings levels)) and USC, as
applicable. In addition, Irish employment legislation will
automatically imply a host of employment rights and employer
obligations into the relationship. Some of these obligations, for
instance payment for annual leave accrued, public holidays and
statutory redundancy payments, carry a further potential
liability.
