LA Task Force Says “GAME ON” in Fight to Stop Misclassifying Workers (LA)

10/26/17
WorkersCompensation.com

Baton Rouge, LA (WorkersCompensation.com) – It’s a hidden crime with thousands of unsuspecting accomplices, a multi-million dollar payroll, and an unfair business advantage to the bad guys. But a team of state and federal agencies are working together to tell companies that if they misclassify workers, then it is GAME ON.

GAME ON is the acronym for Government Against Misclassified Employees Operational Network, a unique task force found only in Louisiana. Partnering together are the Louisiana Workforce Commission (LWC)’s Unemployment Insurance and Office of Workers’ Compensation divisions and the Louisiana Department of Revenue, with cooperative agreements with the Internal Revenue Service and the U.S. Department of Labor’s Wage & Hour Division.

“We are putting companies on notice that misclassifying workers won’t be tolerated in Louisiana,” said LWC Executive Director Ava Dejoie. “The practice isn’t fair to the unsuspecting workers who are cheated out of critical benefits and protections, and it’s not fair to the thousands of businesses who ‘play by the rules’ but are undercut by companies that intentionally trim labor costs by misclassifying.”

Misclassification refers to a worker who by law is an employee, but is incorrectly classified as something other than an employee. Most misclassifications usually involve workers labeled as independent contractors.

The GAME ON task force has focused efforts on the industries historically known to use independent contractors to a large degree, namely construction, health care, hospitality, personal services and staffing companies.

(Read More)

Are Georgia firms cheating 1,000s of workers out of benefits, health care? (GA)

By Jon Greenberg on Thursday, August 10th, 2017 at 2:51 p.m.

With health care policy in limbo in Washington, the politicians who would like to be Georgia’s next governor are staking out their own policy outlines. Democratic State Rep. Stacey Evans favors expanding Medicaid, but said the state could take other action as well.

“There are thousands of Georgia workers that are misclassified as independent contractors, so that their employers can wrongfully deny them the benefits that they deserve, including health care,” Evans said Aug. 5. “By expanding Medicaid and classifying workers appropriately, insurance will be available to hundreds of thousands more Georgians.”

We decided to check Evans’ number of misclassified workers, and found she’s on safe ground.

Defining misclassification

Some businesses avoid treating workers as employees by calling them an independent contractor. The person might work only for that one business, use equipment the business provides and do exactly what the business tells him or her to do, and yet be labeled as if the person was in business for themselves.

The advantage for companies is they avoid paying a number of employment taxes, including Medicare, Social Security and unemployment insurance. If they offer health insurance, they would sidestep that too.

As Georgia’s Department of Labor put it, “independent contractors are not independent just because that is what their employer calls them, because that is what they call themselves, or because they sign an ‘independent contractor agreement.’ Independent contractor status depends on the underlying nature of the work relationship.”

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LWC Focus on Misclassification of Workers Yielding Record Results

By WorkersCompensation.com
11/17/2015

 

Baton Rouge, LA (WorkersCompensation.com) – The Louisiana Workforce Commission is on track toward a second consecutive record-setting year in the identification of workers misclassified by employers as independent contractors.

Through November 12, 2015, LWC identified nearly 9,400 misclassified employees in audits of 865 companies. Audits in process through the end of 2015 are expected to surpass 2014’s record discovery of 12,782 misclassified employees.

Misclassifying employees as independent contractors can lead to companies not paying unemployment taxes, workers’ compensation premiums and their portion of Social Security and Medicare taxes. They may also gain an unfair competitive advantage over competitors by improperly lowering their labor costs.

(Read More)

New Misclassification Study Shows Impact in California

By Jim Kollaer on Wed, 10/15/2014 – 10:30am 

In a September 2014 study entitled Sinking Underground: The Growing Informal Economy in California Construction, misclassification of more than 39,800 construction workers is a key reason that the underground economy in construction is contributing to the low wages, difficulty in recruiting qualified craft workers and loss of wages and taxes in the State of California.

According to the study, released by the Economic Roundtable, a non profit research organization based in Los Angeles, in 2011 more than 143,900 construction jobs in the state were “informal” – code for off the books, misclassified as independent contractors or unreported by employers.

The study looked at wages and construction jobs from 1972 to 2012 and found that the number of construction workers that were unreported or misclassified increased by 400% during that period.

The study cites that, “Specialty trades, such as drywall, have the highest level of informality with over 25% employed informally in 2012.  Building Construction was next, with 20% estimated to be informal.”

The major impact on the industry is that those construction companies in California who are “doing it right” have costs that are 30% higher that the “off the books and misclass” contractors.  Imagine what that disparity does to the bidding process.  The report cites several personal stories to illustrate its points.

(Read More)

(link to Economic Roundtable)

(link to pdf of Economic Roundtable study)

Labor law violations alleged at new Holiday Inn Express; lien seeks more than $247,600 in unpaid wages

The California Labor Commission on Monday filed a lien on the Holiday Inn Express property in Eureka with the Humboldt County Recorder’s Office to recover more than $247,600 in unpaid wages for 31 construction workers.

PacWest Contracting, the subcontractor hired by Jansen Construction to build the hotel, allegedly misclassified employees as independent contractors to pay them less, California Department of Industrial Relations spokesman Peter Melton said.