A recent national survey over over 1,000 registered voters conducted on behalf of the National Employment Law Project (NELP) found that “voters say the increase in contracting out – where a company hires an outside firm to supply workers or uses another firm to do work instead of hiring employees directly – over the past 10 years is a bad change.”
“Worker advocates say misclassifying employees as independent contractors allows employers to shirk responsibilities for providing government-mandated worker protections, including overtime pay, family and medical leave – and a safe and healthy workplace.”
Transportation billboards, digital ads and radio spots in markets across Pennsylvania are being used to increase the general public’s awareness understand the implications at stake of misclassifying employees as independent contractors, and to help employers and employees know when a worker can be classified as an independent contractor.
In November of 2015, eight National Freight Inc. (NFI) delivery drivers filed a lawsuit accusing the company of misclassifying drivers as independent contractors despite NFI having complete control of their operations, according to court documents.
The denial of minimum wages, overtime compensation, family and medical leave, and unemployment and workplace safety protections are all potential consequences of the misclassification of workers as independent contractors. Costly lawsuits against employers who may be liable for unpaid overtime and minimum wages, as well as back pay, court costs and attorneys’ fees.
“The Department of Labor is entering into enforcement partnerships with state agencies for “information sharing and coordinated enforcement” in support of its Misclassification Initiative, according to its website.”
“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.