IRS Hiring Additional Agents, Providing Additional Resources for Misclassification Enforcement

Posted by National Alliance for Fair Contracting on

by Scott Braddock
Wed, 05/25/2016 – 7:53am

The recent announcement by the IRS Commissioner that the agency is moving forward with hiring hundreds of additional agents has sparked a debate about exactly how those new resources should be utilized. Some leaders in the construction industry have told Construction Citizen that if the government has more people on hand to enforce the law, proper classification of workers should be a priority.

Misclassification is the practice of designating an employee as a “1099 worker” or an independent contractor when that person, by law, should be compensated as an employee.

Unscrupulous employers do it as a way of sidestepping payroll taxes, unemployment taxes, and workers’ compensation insurance. Even though there are many legitimate uses of contract labor, abuse of the classification gives cheating companies an ability to submit lower bids for projects, undercutting ethical contractors who follow the letter of the law.

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Cambridge Takes Steps to Protect Workers from Wage Theft (MA)

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Richard Rogers and Darlene Lombos
03/18/2016

This week, workers in Cambridge, Massachusetts, gained new protections for making sure they are paid fairly and on time. On March 14, city manager Richard Rossi signed an executive order establishing certification requirements for vendors bidding on city contracts. The measure seeks to prevent wage theft, which is the improper withholding of payment from employees and the failure to pay employees according to required schedules. Wage theft most often involves employers paying less than the minimum, contracted or prevailing wage, not paying for all hours worked, or not paying overtime for hours exceeding 40 per week. But wage theft can take many forms—employers may never send the final paycheck or may misclassify workers as independent contractors.

“This executive order is a clear indication of Cambridge’s continuing commitment to wage justice,” Rossi said. “The provisions put into effect today provide the city the protections that are needed to ensure that we are dealing with quality contractors. We have created a simple and fair process for both the city and for our contractors.”

Under the executive order, vendors bidding on city contracts will be required to certify their compliance with federal and state wage law with the city, and if the vendors have previous violations, they are required to disclose them and provide a wage bond for the duration of the contract. These measures strengthen the city’s ability to hire vendors that treat their employees fairly.

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Cambridge Takes Steps to Protect Workers from Wage Theft (MA)

Posted by National Alliance for Fair Contracting on

03/18/2016
Richard Rogers and Darlene Lombos

This week, workers in Cambridge, Massachusetts, gained new protections for making sure they are paid fairly and on time. On March 14, city manager Richard Rossi signed an executive order establishing certification requirements for vendors bidding on city contracts. The measure seeks to prevent wage theft, which is the improper withholding of payment from employees and the failure to pay employees according to required schedules. Wage theft most often involves employers paying less than the minimum, contracted or prevailing wage, not paying for all hours worked, or not paying overtime for hours exceeding 40 per week. But wage theft can take many forms-employers may never send the final paycheck or may misclassify workers as independent contractors.

“This executive order is a clear indication of Cambridge’s continuing commitment to wage justice,” Rossi said. “The provisions put into effect today provide the city the protections that are needed to ensure that we are dealing with quality contractors. We have created a simple and fair process for both the city and for our contractors.”

Under the executive order, vendors bidding on city contracts will be required to certify their compliance with federal and state wage law with the city, and if the vendors have previous violations, they are required to disclose them and provide a wage bond for the duration of the contract. These measures strengthen the city’s ability to hire vendors that treat their employees fairly.

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DOL Signs Agreement with RI Department of Labor and Training

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The agreement is a new effort by the agencies to work together to protect the rights of employees and level the playing field for responsible employers by reducing the practice of misclassification. 

May 08, 2015

 

The U.S. Department of Labor and the Rhode Island Department of Labor and Training signed a three-year memorandum of understanding intended to protect the rights of employees by preventing their misclassification as independent contractors or other non-employee status. Under the agreement, both agencies will share information and coordinate law enforcement, according to DOL’s release.

The agreement is a new effort by the agencies to work together to protect the rights of employees and level the playing field for responsible employers by reducing the practice of misclassification. Before the Rhode Island Department of Labor and Training agreed to partner with DOL, Alabama, California, Colorado, Connecticut, Florida, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New York, Utah, Washington, Wisconsin, and Wyoming agencies also signed similar agreements.

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For more information on misclassification, visit (DOL/Misclassification)

 

DFW Television Report Puts Spotlight on Worker Misclassification

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by Scott Braddock on Wed, 04/29/2015 – 7:36am

In an explosive investigation that drew the attention of many average Texans over the weekend, WFAA Television in Dallas/Fort Worth put a bright spotlight on the problem of worker misclassification. It’s a problem the Construction Citizen team has exposed for years and we greatly appreciate any time other media outlets take up the cause as well.

This most recent outrage came to light after three men working as independent subcontractors underneath Thanksgiving Tower in Dallas died in a horrific accident. But, the companies involved have denied damages to their families. How can that be?

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Cheating by Unethical Employers Reaches Crisis Levels While Texas Lawmakers Sit on Their Hands

Posted by National Alliance for Fair Contracting on

by Scott Braddock on Wed, 04/08/2015 – 5:46am

 

Over the years, the Construction Citizen team has put a bright spotlight on the myriad problems caused by worker misclassification. Those difficulties continue to mount while Texas lawmakers do very little about it, much to the frustration of ethical companies that cannot compete with cheaters, many single mothers who are denied child support payments, conservative activists upset about illegal immigration, and workers’ rights advocates who believe in a better standard of living for those who toil in the hot Texas sun.

Worker misclassification is one of the major underlying problems when it comes to fixing all those challenges.

If you’re unfamiliar, worker misclassification is a fancy term for cheating on payroll. That’s why labor activists call it “payroll fraud.” It happens when a boss pretends their worker is an “independent subcontractor” instead of an employee even when, by law, the person should be on the books as an employee. Many employers do this with the goal of avoiding payroll taxes, workers’ compensation coverage, and other benefits and protections in place when there is a true employer-employee relationship. Keep in mind that there are many legitimate uses of contract labor, but the IRS has legal definitions for who is an employee and who is a contractor.

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Texas Urged to Crack Down on Employers That Misclassify Workers

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By Julian Aguilar

March 15, 2015

 

Workers’ rights groups in Texas are revamping their efforts to increase protections for low-income laborers by urging lawmakers to crack down on employers that intentionally misclassify their employees.

Misclassifying workers as independent contractors – rather than employees – allows employers to avoid paying payroll taxes, overtime and workers’ compensation. The practice also allows employers to skirt federal law that requires new hires to provide proof that they can work in the country legally.

About 35,000 Texas workers were misclassified between 2010 and 2012, according to the Texas Workforce Commission. That includes 4,300 in the construction industry and 4,100 in the health care and social assistance industries. Those workers’ employers should have paid about $2.4 million to the state’s unemployment insurance fund, according to a report by the Legislative Budget Board.

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NC board takes action against construction firm

Posted by National Alliance for Fair Contracting on

Wake GOP legislator wants to change law to protect workers from job misclassification

BY MANDY LOCKE AND RICK ROTHACKER
03/07/2015

For businesses that want to install plumbing or heaters in North Carolina, here’s a message from state regulators: Follow the law and treat workers as employees or don’t do business here.

If some legislators have their way, that message will be locked into law during this session of the General Assembly for those companies and other employers. Companies that improperly treat employees as contractors could risk their professional licenses and face steep fines. Those that do would be barred from doing business with the state.

“We’ve got to protect the worker and fair competition in this state,” said Rep. Gary Pendleton, a Wake County Republican who is planning to introduce a bill Monday that would make employee misclassification a violation of the law.

State seeks cheating employers

Posted by National Alliance for Fair Contracting on

BY MAGGIE LEE

March 3, 2015

 

 

ATLANTA — An untold number of Georgians are working when and where their bosses say, but instead of getting the benefits of employees, they are classified as contractors.

Some say that hurts the employee, the government and law-abiding companies. Now, the state Legislature is starting to listen.

State Rep. Ronnie Mabra, D-Fayetteville, is an attorney who said his law firm hires employees but also works with contractors. He told a House of Representatives panel that he respects the difference, but other employers are known to cheat and put workers in the wrong category.

“We have the issue where employers are misclassifying employees and independent contractors,” Mabra said Tuesday.

What that means is some employers set tight rules on the people who work for them but cut their own payroll tax bills by hiring the workers as contractors instead of as employees.

Misclassification is “pretty widespread,” said Ted Terry, state campaign director at the Georgia AFL-CIO. Some cable installers, construction workers, stagehands and even security guards at strip clubs are frequently used as employees but classified as contractors, Terry said

Governor Cuomo Announces $30 Million in Recovered Wages

Posted by National Alliance for Fair Contracting on

Record Amount Disbursed to More Than 27K Workers for 2014

February 4, 2015 | Albany, NY

Governor Andrew M. Cuomo today announced a new record in 2014 for the amount of money returned to workers who originally were not paid the proper minimum wage, overtime pay or fringe benefits. In 2014, $30.2 million was disbursed to nearly 27,000 workers – more than any previous year and a 35 percent increase in recovered funds over 2013.

“No one should be cheated out of their hard-earned wages, and as these numbers show, our administration is making a difference for workers across the State by actively cracking down on wage theft,” Governor Cuomo said. “I’m proud to say that investigators recovered more stolen wages in 2014 than ever before – which means more money stays with the hard-working men and women who earned it in the first place.”

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