Saturday, May 1, 2010

New Legislation to Address Employee Misclassification

WASHINGTON — New legislation has been introduced in the Senate by Sen. Sherrod Brown (D-Ohio) aimed at preventing workers from being misclassified as independent contractors. U.S. Rep. Lynn Woolsey (D-Calif.) has introduced similar legislation in the House of Representatives.

The Employee Misclassification Prevention Act amends the Fair Labor Standards Act of 1938 to add safeguards for misclassified workers.

"I applaud Sen. Brown and Rep. Woolsey for their efforts to address this significant and troubling issue. One of my goals as secretary of labor is to secure minimum and overtime wages and to help middle class families remain in the middle class,” said U.S. Secretary of Labor Hilda L. Solis. “Working on the issue of misclassification is key to attaining those goals because misclassification of employees as independent contractors deprives employees of critical workplace protections and employment benefits to which they are legally entitled.”

The legislation would reduce misclassification violations by:

  • Ensuring that employers keep records that reflect the accurate status of each worker as an employee or non-employee and clarifying that employers violate the Fair Labor Standards Act when they misclassify workers.

  • Increasing penalties on employers who misclassify their employees and are found to have violated employees' overtime or minimum wage rights.

  • Requiring employers to notify workers of their classification as an employee or non-employee.
  • Creating an "employee rights web site" to inform workers about their federal and state wage and hour rights.

  • Providing protections to workers who are discriminated against because they have sought to be accurately classified.
  • Require states to strengthen their penalties for misclassification and conduct audits on employers who misclassify workers.

The bill also gives the Department of Labor and the Internal Revenue Service permission to refer incidents of employee misclassification to one another.

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