Misclassification of employees as independent contractors is the way in which the United States and other countries classify the problem of false self-employment.
The U.S. Government Accountability Office (GAO) reports that the IRS claims to lose millions of dollars in uncollected payroll, social security, Medicare and unemployment insurance taxes because of misclassification of independent contractors by taxpayers.
Employers who have no employees are not required to make payments to the unemployment insurance fund (since there is no one to claim benefits).
(source) Archived 2022-03-16 at the Wayback Machine Service sector employees are more likely than others to be misclassified as independent contractors.
Commonly misclassified positions include delivery and taxi drivers, nurses and home health aides, housekeepers[7] and adult entertainment workers.
[9] In Australia in the 1950s, certain coal mining operations attempted to dodge mandatory pension payments for mineworkers, through contracting and sub-contracting which "made it difficult to classify the employees of contractors and sub-contractors".
Some of the drivers sued after California passed a law aimed at requiring gig economy companies to classify workers as employees that took effect January 1, 2020.