More than $39 million in grants awarded to improve performance, integrity of state unemployment insurance programs and reduce worker misclassification

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43 states, District of Columbia, and Puerto Rico receive funding

 

ETA News Release 9/22/2015
Release Number: 15-1888-NAT

WASHINGTON – More than $39.3 million in federal grants awarded today will enhance unemployment insurance programs in 45 states and territories, and reduce the misclassification of employees as independent contractors, the U.S. Department of Labor announced.

The funding will help prevent and detect improper benefit payments, improve program performance, address outdated information technology systems, and combat employee misclassification that underpays and denies benefits to workers and hurts local economies.

“For more than 80 years, the unemployment insurance system has been a crucial lifeline for millions of working people who lost their job through no fault of their own,” said U.S. Secretary of Labor Thomas E. Perez. “These grants will help states use every tool at its disposal to ensure payments are available to those who are eligible, and take important steps to reduce and recover improper payments. The funds will also identify new ways to level the playing field for responsible employers.”

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US Department of Labor signs agreement with Hawaii’s Department of Labor and Industrial Relations to protect workers from misclassification

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WHD News Brief: 9/04/2015
Release Number: 15-1761-SAN

 

Participants: U.S. Department of Labor’s Wage and Hour Division and the State of Hawaii’s Department of Labor and Industrial Relations

Partnership description: The U.S. Department of Labor’s Wage and Hour Division and Hawaii’s Department of Labor and Industrial Relations have 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

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More than half of states now onboard with feds’ IC misclassification fight

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September 08 2015

 

Vermont signed a three-year memorandum of understanding with the US Department of Labor to fight misclassification of employees as independent contractors – it’s the 26th state to do so, following Alaska in August and Kentucky in July.

“Misclassification deprives workers of their hard earned wages and undercuts businesses that follow the law,” said David Weil, US Department of Labor Wage and Hour Division administrator. “This agreement sends a clear message that we are standing together with the state of Vermont to protect workers and responsible employers.”

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U.S. Department of Labor Publishes Final Rule Implementing Pay Transparency Executive Order

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posted on: Friday, September 11, 2015

 

Today (September 10, 2015), the Department of Labor issued its final rule, implementing Executive Order 13665  (the “Order”), which prohibits federal contractors from firing or otherwise disciplining employees or job applicants for discussing their pay or the pay of their co-workers.  The final rule goes into effect on January 11, 2016.

The final rule comes after the Department of Labor received 6,524 comments from stakeholders.  Among other things, the final rule amends the equal opportunity clauses in Executive Order (“EO”) 11246 to afford protections to workers who discuss pay; codifies certain defenses for contractors; and adds employee notice provisions.  The new regulation’s key points are discussed below.

Applicability

The final rule applies to both federal contracts and subcontracts “entered into or modified on or after [January 11, 2016] that exceed $10,000 in value.”  Modification of a contract includes changes to any term or condition of the contract, as well as extensions and renewals of existing contracts.

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DOL is Watching: Are You properly Classifying Employees?

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posted on: Wednesday, September 16, 2015

 

Recently, the United States Department of Labor (DOL) issued an Administrator’s Interpretation regarding the classification of independent contractors under the Fair Labor Standards Act (FLSA or Act). Much has been written about this “interpretation.” In review, the interpretation is best understood as an aspirational view based on an administrative belief that all workers should be employees. While DOL’s interpretation is supported by case law, in many cases, the supporting law constitutes minority or aberrational positions. Whether DOL’s position is ultimately sustained by the courts or not, it is important to understand DOL’s enforcement position.

The DOL takes the position that “most workers are employees under the FLSA’s broad definitions.” This pronouncement strongly signals that the DOL will continue to aggressively pursue misclassification claims. The DOL has entered into memoranda of understanding with at least 25 state enforcement agencies, as well as the IRS, in order to bring enforcement actions regarding alleged misclassifications.

Decisions of the DOL Administrative Review Board – April 2015

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DAVIS-BACON ACT; ARB FINDS IN SPLIT DECISION THAT A BALANCING OF BENEFITS’ TEST APPLIES TO DETERMINE WHETHER AN EMPLOYER IS OBLIGATED TO REIMBURSE EMPLOYEES FOR LODGING EXPENSES

DAVIS-BACON ACT; REIMBURSEMENT FOR LODGING EXPENSES SHOULD BE BASED ON ACTUAL EXPENSES WHERE EMPLOYER LEFT IT TO EMPLOYEES TO FEND FOR THEMSELVES; PER DIEM MAY BE CONSIDERED, HOWEVER, WHERE IT WAS A PARTIAL PAYMENT FOR SUBSISTENCE COSTS

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(See Full Decision Here)

Why Wage Theft Is a Growing Problem in America

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Sienna Beard
March 31, 2015

The Wage and Hour Division (WHD) of the Department of Labor protects wages and enforces laws that cover more than 7.3 million establishments and 135 million workers. The WHD has determined that certain industries are more likely to have workers who are cheated out of their wages, as well as workers who are less likely to speak up against those who are cheating them.

In order to have far-reaching results, the WHD uses civil money penalties, liquidated damages, and debarments; it is also looking at supply chains and attempting to discourage the use of subcontractors or suppliers who don’t follow the laws. In addition, staffers publicize violations so that employers can be educated about their responsibilities. This makes it possible for employers and employees to learn from the issues that other companies face. The WHD’s job is to protect the wages of citizens, but you can also take steps to protect your own wages.

In 2014, the WHD discovered that $240 million was owed to more than 270,000 workers. Since fiscal year 2009, the WHD has recovered over $1.3 billion in back wages for more than 1.5 million workers. According to the U.S. Department of Labor Blog, an average of over $659,000 in back wages were collected each day last year; more than $890 for each employee due back wages. That equates to 2.9 paychecks for a maid or housekeeper, and 3 paychecks for a cashier. Also last year, the WHD recovered $79 million owed to 109,000 workers in low-wage industries. The WHD targets its investigations based on data, and evidence leads them to industries where there are often problems and violations. From 2009 to 2014 there was a 20% increase in establishments found to be in violation. Of agency-initiated investigations during 2014, 78% were found to be in violation.

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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)

 

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

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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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Misclassification of workers called a ‘serious’ problem

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Laurie Merrill, The Republic
8:13 p.m. MST April 1, 2015

 

The federal government is using enforcement and education in its ongoing battle to stop construction businesses from hiring off-the-books laborers to cut costs, a Labor Department official said.

“There are, sadly, businesses out there that use misclassification as a business model,” David Weil, U.S. Department of Labor’s Wage and Hour Division administrator, said at a construction industry seminar in Phoenix Wednesday.

The practice of paying lower wages to untrained workers by misclassifying them as independent contractors is growing, Weil said. By doing so, companies avoid paying taxes, employment insurance, liability coverage and legal wages. Underpaid employees often are afraid to come forward.

“The misclassification of employees as independent contractor presents one of the most serious problems facing affected employees, employers and the entire economy,” Weil said.

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