France, the Netherlands and the United States are already flagged as misclassification hotspots in global contractor engagement, and with good reason. With rules tightening and penalties growing, the stakes for agencies and hirers have never been higher.
But there's one angle for risk that is regularly missed.
While most are busy calculating the odds of a tax authority audit, the real trigger often comes from somewhere much closer. Inside the working relationship itself – workers.
In most misclassification cases, it's not regulators, auditors, or random checks that initiate the process. It’s when a contractor makes a claim.
Disagreement over pay or benefits.
Poorly handled exit.
Shift in working patterns or expectations.
The reasons vary, but the outcome is often the same.
Consistent Pattern Across Borders
In France, claims rarely begin with a tax inspection, but when workers take their cases to the Conseils de Prud'hommes — labour courts that focus not on contracts but on how the relationship actually works. These tribunals look at questions of subordination, integration and control.
In the Netherlands, complaints from contractors often result in full employment assessments. This is especially common where gezagsverhouding — the presence of authority and dependence — is visible in the day-to-day dynamic.
This trend isn't limited to Europe or the US. Similar patterns are already emerging across Latin America and Asia. The legal definitions may differ, but the core issue repeats itself where contractors are questioning their status, and businesses are facing retrospective claims.
In some cases, particularly in the US, what begins as a single complaint can evolve into a class action.
These cases expose the agencies and clients behind the chain of engagements. Legal and reputational risks multiply.
So the question is no longer 'how likely is an audit?', but 'how likely is a challenge from someone already working inside your model?'
Rethinking the Risk
If your classification model can't hold up to scrutiny from the workers themselves, it’s a challenge hard to overcome. Legal frameworks in high-risk markets no longer rely on paperwork alone. That means courts and regulators will examine how the role is carried out, focusing on:
- Who gives the instructions, and how often
- Whether the worker relies economically on the engager
- How embedded the contractor is within internal teams
- Whether the arrangement reflects a permanent role, not a project
The contractor doesn't need to wait for an investigation. They can bring the case themselves. And more often than not, they win.
Most claims don't arise from deliberate non-compliance. They come from blurred lines. A contractor who works fixed hours. Someone who reports to a line manager. A role that slowly expands until it resembles a full-time post. These things happen gradually until they become evidence.
That shift is being accelerated by knowledge.
Online forums, legal tech providers and worker communities are making it easier to spot the signs. Contractors are asking better questions, accessing support and acting with greater confidence. Many are now backed by no-win-no-fee legal services that make it easy to contest misclassification.
The Strategic Blind Spot
Too many companies still treat misclassification like a long-shot compliance risk - something with low odds and high damage, but unlikely to materialise. The reality is very different.
Misclassification doesn't usually explode. It builds slowly, quietly and from within.
That's why the traditional risk-based model — the one that focuses on the likelihood of audit — is no longer enough. The real exposure is operational and sits inside the structure of the work itself.
What Can Agencies Do
Agencies can stay ahead by reviewing contractor engagements against the reality of day-to-day work. They're not relying on contract terms alone. They're using compliance partners who understand jurisdictional nuances and can build a defensible position across markets.
They can take simple, preventative steps that include:
- Avoid using independent contractor models for roles that involve long-term commitment or direct oversight
- Build understanding of how classification is defined locally, not just contractually
- Align internal teams, including hiring managers, finance and HR
- Making sure every engagement is built for scrutiny, not just speed
In today's market, reputational damage travels quickly, especially when the challenge comes from the person already inside the system.
Misclassification doesn't go wrong at the point of audit. It goes wrong in the everyday, starting long before anyone notices.
Giant’s Classification Approach Across Jurisdictions
Giant’s worker classification process is designed to reflect how work is carried out in practice, applying the legal test that matters most in each jurisdiction. From control-based frameworks in Europe to the ABC test in parts of the US, the assessment is weighted to prioritise the factors that carry the most legal significance.
We collect signed input from both the worker and the end hirer to build an accurate view of the engagement. Each response is scored through a structured process with oversight from our in-house legal team.
While the responsibility for day-to-day compliance rests with those directing the work, our structured approach helps reduce exposure and support informed decision-making across markets.
