Misclassification of workers can result in fines and damage to a company's reputation, and can even result in a company's ability to hire contracted workers. What steps can a company take to avoid this?

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How to Avoid Misclassifying Contractors
As work continues to evolve on a global scale, an increasing number of
people are opting out of regular employment and joining the “gig
economy.” Instead of taking regular, full-time positions at companies,
more workers are choosing freedom over stability through short-term
contract work.
Since contractors are self-employed, this allows employers top be
exempt from many obligations (i.e. employee taxes, social security,
entitlement to benefits). However, when a contractor qualifies as a
regular worker, heavy fines may ensue.
So how can a company avoid misclassifying a contactor?

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Avoiding Classification Errors
1. Learn the specific laws governing employee classification in your
country or countries where your company employs contractors
2. Conduct a review of each contract worker to ensure that you are
not directing the worker in how to do their job, you are not
maintaining financial control over the contractor, and the worker
is not providing vital services on a regular basis.
3. Maintain channels of communication with each contractor. Allow
them to express concerns when the line between contractor and
regular employee are crossed.

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4. Create company policy to ensure that anyone with hiring power or
oversee a contracted worker received proper training on the different
worker classifications to ensure that the proper standards are consistently
met.
5. Put the relationship in writing through a contract. Although a contract is
not enough on its own to determine status of a worker, a carefully
delineated set of expectations for both sides can help ensure that
everyone is on the same page and serve as a guideline for procedures,
minimizing the risk of misclassification.