Category Archives: Misclassification

jobs2

The Vanishing Concept of a Job

Today’s post comes from guest author Jon Gelman from Jon Gelman, LLC – Attorney at Law.

While reviewing some historical cases today, I realized that what is missing from the workplace is the concept of “a job.” America’s economy has dramatically changed, and so have jobs that were once available its workforce.

Even clearer is the fact that the concept of a job has disappeared. The idea of getting up in the morning and going regularly to a job has even vanished. The evolution changed slowly with the young generation claiming that a job cycle transformed from a lifetime position to one lasting two years. Then the next stage in the evolution occurred, where the employee became a transient worker and daily the job changed and no stable employer really exists.

This evolution has eroded the underlining framework of a functional workers’ compensation program and the delivery of benefits. The injured worker becomes lost to the system, and a safe and secure workplace becomes an illusion. Lost in the complexity is the adequate reporting of accidents and occupational disease, and the ability to accurately follow the evolution of latent diseases and medical conditions.

“A new trend in the U.S. labor market is reshaping how management and workers think about employment, while at the same time reshaping the field of occupational safety and health. More and more workers are being employed through “contingent work” relationships. Day laborers hired on a street corner for construction or farming work, warehouse laborers hired through staffing agencies, and hotel housekeepers supplied by temp firms are common examples, because their employment is contingent upon short term fluctuations in demand for workers. Their shared experience is one of little job security, low wages, minimal opportunities for advancement, and, all too often, hazardous working conditions. When hazards lead to work-related injuries, the contingent nature of the employment relationship can exacerbate the negative consequences for the injured worker and society. The worker might quickly find herself out of a job and, depending on the severity of the injury, the prospects of new employment might be slim. Employer-based health insurance is a rarity for contingent workers, so the costs of treating injuries are typically shifted to the worker or the public at large. Because employers who hire workers on a contingent basis do not directly pay for workers’ compensation and health insurance, they are likely to be insulated from premium adjustments based on the cost of workers’ injuries. As a result, employers of contingent labor may escape the financial incentives that are a main driver of business decisions to eliminate hazards for other workers.”

Click here to read “At the Company’s Mercy: Protecting Contingent Workers from Unsafe Working Conditions”

Iowa_Department_of_Workforce_Development

Iowa Joins U. S. Department of Labor to Reduce Misclassification of Employees as Independent Contractors

The U.S. Department of Labor Wage and Hour Division and Iowa’s Department of Workforce Development  have joined in a memorandum of understanding on January 17, 2013,to protect the rights of employees by preventing their misclassification as independent contractors by employers.Iowa is the 14th state to form this type of partnership with the Labor Department.

The DOL in August 2009 determined:

  1. In FY 2007 states uncovered at least 150,000 workers who did not receive the benefits to which they were entitled because their employers misclassified them as independent contractors; and
  2. Approximately 10.3 million American workers, or 7.4 percent of the employed workforce, are classified as independent contractors, although it is not clear how many of these are misclassified.

Although legitimate independent contractors are an important part of our economy, the misclassification of employees presents a serious problem, as these employees often are denied access to critical benefits and protections – such as family and medical leave, overtime compensation, workers’ compensation benefits, minimum wage pay and Unemployment Insurance – to which they are entitled.  In addition, misclassification can create economic pressure for law-abiding business owners, who often find it difficult to compete with those who are skirting the law.  Employee misclassification also generates substantial losses for state Unemployment Insurance and workers’ compensation funds.

Memorandums of understanding with state government agencies arose as part of the department’s Misclassification Initiative, which was launched under the auspices of Vice President Biden’s Middle Class Task Force with the goal of preventing, detecting and remedying employee misclassification.  California, Colorado, Connecticut, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington have signed similar agreements.