Stop Companies from Denying Wages & Benefits by Misclassifying Workers
May 27th, 2008
The seven unions and six million members of Change to Win applaud Reps. Rob Andrews (D-N.J.), Lynn Woolsey (D-Calif.), Michael Michaud (D-Maine), and Education and Labor Committee Chairman George Miller (D-Calif.), for introducing the Employee Misclassification Prevention Act of 2008. This legislation will go a long way in protecting workers from unscrupulous companies that misclassify their employees as independent contractors in order to deny them legal wages and benefits, and will help restore the American Dream for America’s workers.
Workers who are misclassified are cheated out of their basic rights to minimum wage and overtime pay, as well as unemployment insurance and workers’ compensation. Misclassification allows low-road employers to undercut and underbid responsible employers. And every year, all levels of government are cheated out of billions of dollars in revenue, which means law-abiding employers and taxpayers end up paying more than their fair share.
Change to Win and other advocates for workers have long believed that misclassification of workers as independent contractors is already a violation of the Fair Labor Standards Act (FLSA).
The Employee Misclassification Prevention Act of 2008 would not only clarify that misclassification is a prohibited act under the FLSA, it would increase penalties under appropriate circumstances, and it would require the Department of Labor and the states to work together to better detect misclassification.
Last month, Reps. Jim McDermott, D-Wash., Richard Neal, D-Mass., and John Tierney, D-Mass., introduced the Taxpayer Responsibility, Accountability, and Consistency Act — a bill that would help close the tax gap by closing tax loopholes that allow employers to get away with misclassification by claiming that “everyone else is doing it.” Together, these two bills are evidence that Congress is getting serious about stemming this insidious and growing abuse of the labor laws and tax laws.
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