Employee Misclassification on the Rise, Lawsuits Follow

In 2012 Wal-Mart agreed to pay 4,500 employees over $4.8 million in back wages and damages after improperly classifying them as independent contractors so that they were not paid overtime, the Department of Labor announced in 2012.  More recently, FedEx has been sued with mixed outcomes, with some drivers found to be contractors and some employees.

According to Phoebe Ryles at the Epoch Times, “Misclassification is rampant in the construction industry, where carpenters, laborers and electricians working on large non-union construction projects are paid as independent contractors, saving the company thousands in workmen’s compensation and unemployment insurance, and costing states millions in unpaid taxes.

“Misclassification happens across a wide range of industries. Cable installers, cleaning workers, security guards, manicurists, local government workers, and even exotic dancers have won misclassification lawsuits in several states.”

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