“Tens of thousands of construction workers are victims of wage theft in Minnesota ever year, but no one knows the exact number. Some of the workers are undocumented and afraid to come forward. Many, regardless of their background or citizenship status, simply don’t know that they are being cheated.”
In 2011, a drywall subcontractor with a large workforce failed to deduct taxes of any kind, pay workers’ compensation, or overtime.
Some contractors use worker misclassification to win competitive bids. They can undercut a rival by 20 percent or more by not paying into insurance pools.
The San Francisco ride-hailing company agreed to pay $12.25 million to settle a worker misclassification class-action lawsuit that was filed in 2013.
The Louisiana Workforce Commission has racked up some impressive numbers in tracking down businesses that improperly classify employees by taking advantage of relaxed U.S. Department of Labor guidelines that now allow for risk-based audits
To date, LWC audits have identified nearly 9,400 employees statewide that have been misclassified as contract labor.
Hicks was formerly the deputy director of the Department of Administration’s Office for Historically Underutilized Businesses. He was an attorney in Chapel Hill prior to working for the state, and worked for a Raleigh area investment firm. He graduated from UNC-Charlotte and obtained a law degree and MBA from N.C. Central University.
North Carolina Gov. Pat McCrory’s new executive order establishes an “Employee Classification Section” within the state’s Industrial Commission that will oversee employee misclassification enforcement by receiving reports of employee misclassification and referring those reports to appropriate state agencies for further action. The yet to be appointed new Director must publish an annual report to the Office of the Governor concerning the Section’s activities, including the number of reports of employee misclassification received, the number and amount of back taxes, wages, benefits, penalties, or other monies assessed, the amount of back taxes, wages, benefits, penalties, or other monies collected, and the number of cases referred to each State agency.
The recent lawsuit against Mary Kay, one of the largest direct sellers in the U.S., may represent a start to the next wave of IC misclassification class actions.