Taxpaying Employers Against Misclassification (TEAM) is a growing group of employers and employer organizations concerned about the issue of employee misclassification and payroll fraud and how it is harming American businesses and workers. These practices result in non-payment of owed taxes and in unfair competitive practices against employers who are legally compliant.
The goal of TEAM is to educate and inform those who may not fully understand the issue of payroll fraud or fully comprehend the negative consequences for lawful employers, workers and government and the taxpayers. The website www.nomisclassification.org will provide handy information on the law, recent research, legislation as well as identify and expose examples of payroll fraud.
What is employee misclassification? Misclassification occurs when employers incorrectly classify workers as independent contractors rather than full-time employees to avoid paying the required taxes and benefits. Simply put, it is a form of payroll and tax evasion.
Why is misclassification such an important issue? By misclassifying workers, an employer is able to save money and gain a competitive advantage over other businesses that follow the rules. Misclassification also hurts the workers, who often assume the employer is making the required deductions from their paychecks and providing them with the basic benefits of full-time employees, only to find out later that they have few or no benefits and are “on the hook” for the unpaid taxes. Ultimately, misclassification also hurts the American taxpayer. When employers fail to make their required contributions, the burden is shifted to everyday citizens.
Although misclassification of full-time employees as independent contractors is sometimes inadvertent, due to a payroll error or misunderstanding of current law, more often than not it is intentional, and the employer deliberately short-changes workers to gain an edge in the marketplace. To make matters worse, laws against misclassification haven’t been enforced aggressively enough, making it easier for unscrupulous employers to slip through the cracks.
What can be done to stop employee misclassification? Due to the economic downturn, federal and state authorities are facing declining revenues and the threat of budget shortfalls. Fiscal solvency is a top priority, and as a result, more attention is being paid to misclassification than ever before. By stepping up enforcement and cracking down on the bad actors, governments can recoup badly needed taxes and, at the same time, level the playing field so that all businesses are competing in a fair and honest environment.
NoMisclassification.org will keep you up to date on major developments regarding misclassification, including:
- Current law
- New legislation
- News items and editorials
- Studies, research and white papers
- Multimedia – audio, video, slide presentations and photos
- Related websites, blogs, forums, listservs and newsletters
However, this will not be a one-way monologue. We want to learn from you and hear your thoughts about misclassification.
Are current laws against misclassification working in your area? If not, what should be done?
Is there weak enforcement of the law and what should be done?
Should employees ever be classified as independent contractors? If not, why not?
Please share your experiences and views!
We look forward to hearing from you.