Tuesday, June 16, 2015

Report: Misclassification is a significant problem for workers

Employee misclassification is not a well-known issue for most people. But with millions of workers teetering on the edge of the U.S. economy, that is changing. And luckily, the Teamsters and other groups are here taking a stand to end the practice also known as wage theft.

A recent Economic Policy Institute report sums up the full size of the problem. Upwards of 20 percent of employers misclassify at least one worker as an independent contractor. Many of these workers are in the trucking and construction industries, but the problem is growing in other sectors as well. While the employer saves on paying taxes and social security as well by not providing health insurance for such workers, the public is left on the hook to support these people if they are injured on the job.

Francoise Carre, the document's author and the research director for the Center for Social Policy at the University of Massachusetts at Boston, said unscrupulous employers engage in misclassification to avoid employment-related obligations:
Misclassification is one way in which employers deprive workers of the ability to bargain over wages and working conditions. It is a troubling and understudied trend and seems to be on the rise. The growth of the "sharing economy," which mostly treats on-demand workers as self-employed, further highlights the need for clarity on employee status.
In recent years, the Teamsters have been actively involved in fighting such issues, both for port truck drivers at the twin ports of Los Angeles and Long Beach as well as with food processors working at places such as Taylor Farms in California's Central Valley. And the union is winning.

Meanwhile, states are beginning to catch onto the scam. The GOP-controlled Georgia Legislature, for instance, is investigating whether companies in that state deliberately misclassify employees as part time or contractors in order to avoid paying minimum wage or payroll taxes.

Companies that engage in misclassification are not paying their fair share. The Teamsters believe that workers should be treated fairly, that the letter and spirit of employment law should be upheld, and that deliberate violations of employment law should be punished to the fullest extent possible.