The misclassification of employees as independent
contractors presents one of the most serious problems facing affected workers,
employers and the entire economy.
Misclassified employees often are denied access to
critical benefits and protections to which they are entitled, such as the
minimum wage, overtime compensation, family and medical leave, unemployment
insurance, and safe workplaces. Employee misclassification generates
substantial losses to the federal government and state governments in the form
of lower tax revenues, as well as to state unemployment insurance and workers’
compensation funds. It hurts taxpayers and undermines the economy.
In recent years, the employment relationship between workers and the
businesses receiving the benefit of their labor has fissured apart as companies have contracted out
or otherwise shed activities to be performed by other businesses. This is
accomplished through, for example, the use of subcontractors, temporary
agencies, labor brokers, franchising, licensing, and third-party management.
Fissuring may lead to the misclassification of employees
as independent contractors in a variety of ways, such as employers simply
mislabeling certain employees as independent contractors to reduce payroll
costs. The Department supports the use of legitimate independent contractors,
who play an important role in our economy, but when employers deliberately
misclassify employees in an attempt to cut costs, everyone loses.
The Wage and Hour Division is working with the IRS and
many states to combat employee misclassification and to ensure that workers get
the wages, benefits, and protections to which they are entitled. We have
entered into partnerships with 22 states to work together on this issue in a
variety of ways – through, for example, information sharing and coordinated
enforcement – to ensure that we are all using our resources most strategically,
effectively and efficiently to address this significant problem. In some cases,
these agreements include the cooperation of the Employee Benefits Security
Administration, Occupational Safety and Health Administration, Office of
Federal Contract Compliance Programs, and the Office of the Solicitor.
This collaboration is making a difference - In Fiscal Year
2014, WHD investigations resulted in more than $79 million in back
wages for more than 109,000 workers in industries such as the janitorial,
temporary help, food service, day care, hospitality and garment industries.
Through this initiative, WHD will continue to strive to assure that workers in
these industries receive a fair day’s pay for a fair day’s work.
Select agencies from the “Quick Links” box to learn more
about the role of each in this critical initiative. Select a state from the
interactive map to view state information and that state’s agreement with WHD.
Resources
Administrator’s Interpretation No. 2015-1: The
Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in
the Identification of Employees Who Are Misclassified as Independent
Contractors (PDF)
Blog Post: Employee or Independent Contractor?
Fact Sheets:
Am I an Employee?: Employment Relationship Under the Fair
Labor Standards Act (FLSA) (Fact Sheet #13)
Coverage Under the Fair Labor Standards Act (Fact
Sheet #14)
Employment Relationship under the FLSA
(Microsoft® PowerPoint®)
No comments:
Post a Comment