Independent Contractor Misclassification: A Rising Tide

Posted by National Alliance for Fair Contracting on

Joeseph E. Vaughan & Thomas R. Bond, The Legal Intelligencer
July 21, 2016

Editor’s note: This is the first in a two-part series.

The U.S. Department of Labor has recognized the misclassification of employees as independent contractors as one of the most serious problems facing affected workers, employers and the entire economy. This agency points out on their website that the employment relationship between workers and the businesses receiving the benefit of their labor has fissured apart as companies have contracted out, or otherwise shared activities to be performed by other businesses. This is accomplished according to this agency through the use of subcontractors, temporary agencies, labor brokers, and franchising, licensing, and third-party management. This sharing 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 course.

The Department for Professional Employees, a part of the AFL-CIO, maintains that employer misclassification of employees as an independent contractor is a widespread phenomenon in the United States. They note that the Internal Revenue Service (IRS) estimates that employers have misclassified millions of workers nationally as independent contractors.

(Read More)

City of Berkeley Enacts First of Its Kind Wage Theft Prevention Ordinance

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By Valerie Gotten – Jul 20, 2016

BERKELEY, Calif. /California Newswire/ – Last night, the City of Berkeley approved a first-of-its-kind local ordinance aimed at preventing wage theft on local construction projects, Smart Cities Prevail announced today.

Authored by Councilmember Laurie Capitelli, co-sponsored by a majority of the Council and supported by construction industry trade associations and workers’ rights groups, the measure requires that developers and builders certify that all contractors performing work on large projects have complied with state wage and hour laws as a condition of winning a certificate of occupancy from the city.

“Enforcing wage laws is especially difficult in the construction industry, because unscrupulous contractors who cheat workers in order to win bids on large projects find ways of disappearing after the work is done,” said Smart Cities Prevail Policy Director Scott Littlehale. “By expanding transparency and accountability BEFORE a project is complete, Berkeley has taken an important step towards preventing wage theft and leveling the playing field for honest construction businesses competing for this work.”

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New York Establishes a Super IC Misclassification-Plus Task Force

Posted by National Alliance for Fair Contracting on

July 21 2016
Richard J. Reibstein

Yesterday, New York Governor Andrew Cuomo signed Executive Order No. 159 expanding the existing Joint Enforcement Task Force on Employee Misclassification into a Joint Enforcement Task Force on Worker Exploitation and Employee Misclassification. Those who follow IC misclassification developments in all 50 states, such as the publishers of this legal blog, were wondering why the annual Task Force Report issued by New York each February 1 for the past eight years had not yet been issued this year. Executive Order No. 159 tells us why – New York has now subsumed IC misclassification into a subset of “worker exploitation.”

Analysis of the New Executive Order

The Executive Order issued in 2007 establishing the Employee Misclassification Task Force required the Task Force to issue an annual report each February 1; this new Executive Order, however, has no such reporting requirement. Nonetheless, simultaneous with the issuance of Executive Order No. 159, the new and expanded Task Force issued its 2016 Report.

The Executive Order recites in its Preamble the reasons for the Governor’s action, and includes the statement that “an increasing number of employers in New York improperly classify individuals they hire as ‘independent contractors,’ even when those workers should be legally classified as ’employees’ . . . .” Neither the Executive Order nor the 2016 Task Force Report, though, provide any empirical data or basis on which the Executive Order based its conclusion that more and more employers in New York are either classifying workers as independent contractors or, more to the point, are misclassifying employees as ICs.

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Registration now open – 18th Annual NAFC Conference – San Diego, CA – Oct. 17 – 19, 2016

Posted by National Alliance for Fair Contracting on

July 6, 2016

NAFC will be holding its Annual Conference in San Diego, CA this year. The Conference will be held at the Hilton San Diego Resort and Spa on Mission Bay, just outside downtown San Diego. This year’s Conference will be jointly sponsored by the Center for Contract Compliance and will have both a national and California state specific focus. The NAFC National Conference is attended by several hundred participants from across the nation, including representatives from labor organizations, fair contractors, fair contracting compliance organizations as well as researchers, academics, attorneys and officials from federal, state and local governments.

Register today, spaces are limited.

(Visit NAFC’s Conference Page)

(Download your registration form here)

USDOL Prevailing Wage Seminars for 2016

Posted by National Alliance for Fair Contracting on

Join us at a Prevailing Wage Seminar in your region!

The Wage and Hour Division (WHD) Prevailing Wage Seminars (Prevailing Wage Seminars) are three-day compliance trainings designed for regional stakeholders (unions, private contractors, state agencies, federal agencies and workers). In these seminars, conference participants will learn about the following:

  • The Davis-Bacon Act and McNamara O’Hara Service Contract Act
  • Executive Order 13495 “Nondisplacement of Qualified Workers”
  • Executive Order 13658 “Establishing a Minimum Wage for Contractors”
  • The process of obtaining wage determinations and adding classifications
  • Compliance assistance and enforcement processes
  • The process for appealing wage rates, coverage, and compliance determinations

 

There is no fee to attend these seminars; however, space is limited. If you wish to attend, please click on the registration link for your desired location and follow the registration prompts. Each attendee must register separately. If registration is not yet open for the event you wish to attend, please check back. Please feel free to email WHDPWS@dol.gov if you have any questions.

Date Location
August 23 – 25, 2016 Portland, OR

For more information regarding the upcoming prevailing wage seminars, as well as information on the DBA and SCA visit http://www.dol.gov/whd/govcontracts or call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243).

(Click Here to Register)

US DEPARTMENT OF LABOR SIGNS AGREEMENT TO PROTECT WORKERS FROM MISCLASSIFICATION WITH SOUTH DAKOTA DEPARTMENT OF LABOR AND REGULATION

Posted by National Alliance for Fair Contracting on

WHD News Brief: 06/01/2016
Release Number: 16-1055-NAT
Participants: U.S. Department of Labor’s Wage and Hour Division
South Dakota Department of Labor and Regulation

Partnership description: The U.S. Department of Labor’s Wage and Hour Division and the South Dakota Department of Labor and Regulation signed a three-year Memorandum of Understanding intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses. The two agencies will provide clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, share resources, and enhance enforcement by conducting joint investigations and sharing information consistent with applicable law.

…

Quotes: “The Wage and Hour Division continues to attack this problem head-on through a combination of a robust education and outreach campaign, and nationwide, data-driven strategic enforcement across industries,” said David Weil, administrator of the Wage and Hour Division. “Our goal is always to strive toward workplaces with decreased misclassification, increased compliance, and more workers receiving a fair day’s pay for a fair day’s work.” David Weil, U.S. Department of Labor Wage and Hour Division Administrator

(Read More)

Protect MO Families launches prevailing wage campaign

Posted by National Alliance for Fair Contracting on

The Missouri Times
June 24, 2016

JEFFERSON CITY, Mo. – The Committee to Protect MO Families started a new public awareness campaign this week to educate middle class families about the prevailing wage as they prepare for attacks similar to right-to-work.

The campaign launched with a video featuring Danny Burlison, a Navy veteran and and Carpenters Union member. The ads will be run throughout the summer.

Protect MO Families also released a study by Dr. Michael Kelsay, an economics professor at the University of Missouri-Kansas City, which explains the benefits of a prevailing wage.

Between online components and in-person meetings and other events, the campaign hopes to educated families and Missourians about the benefits of prevailing wage.

Protect MO Families anticipates attacks on prevailing wage becoming the next battleground in the fight over labor rights that’s already seen right-to-work and paycheck protection legislation be narrowly avoided in upheld vetoes.

(Read More)

(See Full Study Here)

New Responsible Contractor Law website launches (MN)

Posted by National Alliance for Fair Contracting on

July 1, 2016

The website is “Responsible Minnesota”.

This website is a public service that will help stakeholders in public construction learn more about the Responsible Contractor Law (RCL), including a list of ineligible contractors based on a record of their past violations. Project owners, construction managers and general contractors should find this website is a good resource for double checking the eligibility status of their contractors.

(Click Here to Visit Website)

Philadelphia’s Tough New Anti-Wage Theft Law Effective July 1

Posted by National Alliance for Fair Contracting on

6/28/2016
by Timothy McCarthy, Stephanie Peet

Effective on July 1, 2016, the City of Philadelphia’s Wage Theft Law imposes higher penalties for violations than currently are imposed by the state’s anti-wage theft law, provides for a private right of action for alleged violations, and creates the position of Wage Theft Coordinator within the City’s Managing Director’s Office.

While wage theft (typically refers to the intentional non-payment or underpayment of earned wages) is already subject to penalty under Pennsylvania’s Wage Payment and Collection Law (43 P.S. § 260.1 et seq.), Philadelphia’s new ordinance increases employers’ compliance obligations and potential penalties for violations.

Former Philadelphia Mayor Michael Nutter signed into law the City’s first anti-wage theft ordinance (“Wage Theft Law”) on December 1, 2015.

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Oregon Law to Affect Pay Stubs, Time and Pay Records, and Wage Theft

Posted by National Alliance for Fair Contracting on

6/16/2016
by Kelly Riggs

The State of Oregon has enacted a new law, SB 1587, designed to increase transparency with respect to employee pay, prevent wage theft, and expose wage and hour violations. Generally, the law will require employers to provide additional details on itemized pay stubs and allow employees to inspect and request copies of their time and pay records. The law also provides increased enforcement measures and prohibits wage theft by public works contractors and subcontractors. Employers must comply with the new requirements, summarized below, beginning January 1, 2017.

Itemized Pay Stubs

Under the new amendments to the current pay stub statute, ORS 652.610, employers will be required to provide much greater detail on itemized, written pay stubs, including:

  • the date of the payment;
  • the dates of work covered by the payment;
  • the employee’s name;
  • the name and business registry number or business identification number of the employer;
  • the address and telephone number of the employer;
  • the rate or rates of pay;
  • whether the employee is paid by the hour, shift, day, or week or on a salary, piece, or commission basis;
  • gross wages;
  • net wages;
  • the amount and purpose of each deduction made during the period of service that the payment covers;
  • allowances, if any, claimed as part of minimum wage;
  • unless paid on a salary basis and legally exempt from overtime pay, the regular hourly rate or rates of pay, the overtime rate or rates of pay, the number of regular hours worked and pay for those hours, and the number of overtime hours worked and pay for those hours; and
  • if paid on a piece rate, the applicable piece rate or rates of pay, the number of pieces completed at each rate, and the total pay for each rate.

Employers may provide itemized pay stubs to employees in electronic form, but only if (1) the employee expressly agrees to receive them in electronic form; and (2) the employee has the ability to print or store the statement at the time of receipt.

Oregon law already provides that itemized pay stub violations constitute a Class D criminal violation, potentially punishable by a fine of up to $250 for individuals or $500 for corporations. Beginning on January 1, 2017, violations of these new pay stub provisions will also constitute a Class D criminal violation.

(Read More)