Misclassification is Not Going Away
/While the eyes of the world are on the litigation between the attorneys general and the Trump Administration's immigration ban, a January 20th article in the Florida Record carries a story that highlights an issue of great importance to all Americans.
The article discusses a Florida case that alleges an employer misclassified his employees as independent contractors in order to avoid paying employment taxes. In addition, the employer "made illegal deductions from [workers'] earnings to pay insurance on company vehicles."
The article cites a 2011 report we published at Columbia Law School, where we argued that stronger enforcement of state labor laws would benefit both workers and the marketplace. “Without meaningful enforcement by state regulators, employers will simply disregard legal obligations if doing so allows them to save time, money or effort, putting the majority who wish to abide by the law at a significant competitive disadvantage,” the report stated.
According to the National Employment Law Project (NELP), misclassification not only imposes costs to workers, but deprives state/federal coffers billions of dollars in tax revenues annually. The issue is not going away, and with the expansion of the gig economy, it's likely getting worse. Combating misclassification falls squarely in the wheelhouse of all state attorneys general.
Nancy Crist, Lawsuit reflects conflicting 'independent contractor' definition among enforcement agencies, Florida Record (Jan. 20, 2017).
See, National Employment Law Project Fact Sheet: Independent Contractor Misclassification Imposes Huge Costs on Workers and Federal and State Treasuries (July 2015).
See, Editorial: Defining 'Employee' in the Gig Economy, New York Times (July 18, 2017).
See, Jacob Meyer and Robert Greenleaf, Enforcement of State Wage and Hour Laws: A Survey of State Regulators, National State Attorneys General Program at Columbia Law School (April 2011).
