Language Line Services of Monterey, California, provides interpretation and translation services in 170 languages to emergency services operators, online retailers, banks and other businesses across the country.  One corporate decision the $300 million company made, however, involves the difference between two common English business terms – “employee” and “independent contractor.”

More than 97 percent of the company’s nearly 5,000 interpreters – people who’ve mastered languages from Afrikaans to Yiddish – are employees eligible for health care and other benefits. The company also pays its share of federal and state employment taxes and withholds taxes from employee paychecks.

Less than 3 percent of Language Line’s interpreters are independent contractors who get called in for special project work on rare languages such as Woloff, Visayan or Fukienese.

Not all translation companies follow suit.

In fact, Language Line attorney Steven Marc Weinberg says many of the company’s competitors classify all of their interpreters as independent contractors. As contractors, interpreters handle their own taxes and aren’t eligible for employee benefits. Weinberg argues that translation companies using such a set up are able to unfairly undercut prices charged by firms like Language Line. “Some businesses that classify workers as independent contractors end up increasing their bottom line unfairly,” says Weinberg. “It’s tough enough in this economy without so many folks being denied the support they’re rightly owed.”

Read the rest of this American Express “Inside Edge” story by Elizabeth Wasserman here >>

Related links:

• GAO Report on Employee Misclassification This 2009 federal government report found that when they were misclassified, workers didn’t receive protections and governments lost out on tax collections.
• Report on Enforcement Actions against Employee Misclassification Better data and enforcement are needed to cut down on employee misclassification, according to this Treasury Department audit.
• National Employment Law Project his nonprofit workers’ rights group argues that worker misclassification cheats workers, workers’ compensation programs and employment law protections.
• Cost of Worker Misclassification in New York State A 2007 Cornell University study found that between 2002 and 2005, 700,000 workers, or 10 percent of the state’s private sector workforce, had been misclassified.