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  • Missclassification Results In Theft Of Billions From Workers
    Updated On: Apr 07, 2016

    By JoAnne Pow!ers, April 4, 2016

    Wage theft currently costs workers in the United States billions of dollars every year. One of the factors fueling the epidemic of wage theft in U.S. industries is the practice of worker misclassification, where a company declares its employees to be independent contractors who are not eligible for most worker protections. Cathy Ruckleshaus, General Counsel and Program Director of the National Employment Law Project, says that the use of independent contractor misclassification is widespread in many industries:

    [Cathy Ruckleshaus]: “They tell workers ‘if you want this job, you have to form your own business, or you have to say you’re an independent contractor.’ And the reason companies like to do that in some sectors is because then the worker isn’t covered at all by minimum wage or overtime or workers comp or unemployment insurance or other worker protections. And this is a rampant problem in industries like construction, janitorial, home care…a lot of the businesses where we would think those workers really aren’t running their own separate business.”

    Workers have been agitating against the practice of misclassification for years. As a result, the issue has come to the attention of the U.S. Department of Labor:

    [Cathy Ruckleshaus]: “It has a task force with other federal agencies, and about half of the states have set up task forces to look at this problem. And the Department of Labor’s guidance that was issued last summer is really important because it again reminds the employment community, the business and the workers, that under our nation’s wage and hour laws pretty much everyone is supposed to be covered as an employee. So the presumption is essentially that you’re an employee, and it should be scrutinized if you’re asked or you’re being treated as an independent contractor.”

    One of the most prominent misclassification cases is that of truck drivers at U.S. ports, particularly on the West Coast. With the help of the International Brotherhood of Teamsters, the drivers have been winning a number of victories:

    [Cathy Ruckleshaus]: “They’ve made incredible strides, both in bringing the public’s attention to the problem, but also winning great results for the workers in California and in Seattle…showing how an entire industry can have that structure, but then when government agencies get together and the workers feel comfortable coming forward, thanks to the union’s protection, they can start to turn the tide and get some relief.”

    Ruckleshaus says that because enforcement is so piecemeal, even worker victories at the level of single state or city have not managed to stop misclassification:

    [Cathy Ruckleshaus]: “Because it’s so lucrative for these companies to do that, they continue the practices even when they’re losing.”

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