It’s Time To End The Misclassification Scam
May 28th, 2008
A growing corporate scam is quietly eroding the foundation of America’s middle-class.
Corporations are embracing a sly technique called “misclassification.” They shift the costs of doing business onto their employees – and the taxpayers – by improperly classifying them as “independent contractors.”
The employers think it’s great. They tell employees when, where and how to work, what tools to use and where to buy supplies. And in the process they evade nearly all overhead costs like tax withholding, federally mandated leave and employee discrimination liabilities.
It’s not so great for 10 million misclassified workers. They get cheated out of overtime, unemployment insurance, workers compensation, Social Security and Medicare benefits.
The swindle is widespread among port truckers, who barely make a living wage hauling containers from Asia for Target and Wal-Mart.
It’s long been a practice in the construction and small-package delivery industry. It is rapidly spreading to the hospitality industry.
And it isn’t limited to small companies that operate on the margins. The IRS has found Microsoft and FedEx guilty of misclassifying workers. The U.S. Department of Labor charged Time-Warner with employee misclassification and settled the case for millions.
Four House members are taking the lead on putting an end to this scam. Filing the “Employee Misclassification Prevention Act of 2008” last week were Democratic Reps. Rob Andrews of New Jersey, Lynn Woolsey of California, Mike Michaud of Maine and George Miller of California.
The bill would raise the penalties for misclassifying workers. It would require employers to tell workers how they’re classified – and that they have a right to challenge how they’re classified.
It would also require companies to disclose on workers’ records whether they are employees or non-employees.
It’s a good bill that ought to pass. Every day, the Teamsters see the misery that workers go through because of the misclassification scam. It’s time to end it.
Permalink | Comment on this post (0)
By
