Proposed bill would put an end to employee misclassification
A new bill sponsored by Democratic senator Bob Casey seeks to make misclassification of employees a violation of the Fair Labor Standards Act. According to the McClatchy Washington Bureau, lawmakers introduced the measure on Nov. 12. The bill would also create a requirement for employers to provide a written statement regarding classification status.
Misclassification occurs when employers incorrectly define worker duties to avoid paying overtime or benefits. Janitorial, home care and construction professions are frequently affected. In these industries, staff are often classified as independent contractors rather than hourly employees.
In conjunction with the bill proposal, a Senate hearing was scheduled. A Michigan carpenter testified about a workplace accident in which one of his fingers was severed and three others were injured. Due to his classification as an independent contractor, he was unable to receive workers compensation or medical coverage when faced with $100,000 in medical bills.
In addition to the harm done to individual workers, the issue of wrongful worker classification could be costing the federal government an estimated $2.7 billion in revenue, according to The Journal News.
Lawsuits resulting from misclassification of workers are becoming increasingly common. To avoid litigation from employees seeking back overtime pay, it is vital that employers classify workers correctly. Time and attendance software maintain records of employee hours in the event that former contractors seek back overtime pay.
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