Workers who have concerns in relation to their employment status have recourse to the Department’s Scope section. This section determines employment status and the correct class of pay-related social insurance (PRSI). Where misclassification of workers as self-employed is detected, the correct status and class is determined and PRSI arrears are calculated.
Following a Scope decision, an employer will be liable for class A PRSI for the full period of employment. This can be a significant penalty for an employer. Under section 13 of the Social Welfare (Consolidation) Act 2005, an employer is obliged to return the employer and employee contribution of PRSI at the correct rate. Where PRSI contributions have been made at an incorrect rate, the full amount of PRSI owing, both for the employer and employee, is assessed against the employer. There is no statutory limitation restricting the number of years the Department can assess a PRSI liability against an employer who has misclassified their worker.
Separately, where an employee was incorrectly classed as self-employed, they will have paid Class S social insurance contributions directly to the Revenue Commissioners through their annual self assessment. To have their annual assessment amended, a self-employed individual should contact Revenue to review if a PRSI refund may be due. Section 865(4) Taxes Consolidation Act 1997, provides that a claim for repayment for a chargeable period shall not be allowed unless it is made within 4 years after the end of the chargeable period to which the claim relates.
I trust this clarifies the matter for the Deputy.