Masonry Magazine May 2007 Page. 11
Misclassification of Workers
Misclassifying employees as independent contractors allows employers to avoid paying workers of their legal rights and the government of payroll taxes. These employers raise safety and health issues by not paying workers' compensation premiums. "If some contractors are skirting around workers' compensation, then the firms who properly classify employees are forced to carry the load," he said. "If workers' compensation is unavailable to a worker, then our healthcare system has to absorb the cost."
Although this practice is a problem in the construction industry, it is not confined to the building trades. Catherine Ruckelshaus, an attorney with the National Employment Law Project in New York, testified that she has worked on cases across the country involving misclassification of workers. In particular, Ruckelshaus described a case in New York that involved delivery workers for a grocery chain, where the workers were misclassified as independent contractors and paid $90 a week, despite working full-time. As a solution to the problem, Ruckelshaus urged better and more coordinated enforcement by the Department of Labor's Wage and Hour Division and the Internal Revenue Service to crack down on employers that misclassify workers to evade federal wage and overtime laws, as well as payroll taxes.
Rep. Tim Bishop (D-NY) remarked that state laws in Massachusetts and New Mexico presume an employer-employee relationship, and asked if that would work in the construction industry. Ruckelshaus responded, "If it's at the state level, it can work very well." However, she continued, she "was unsure how such a presumption would work at the federal level." Ruckelshaus again emphasized that federal agencies need to improve enforcement of current law. Making the Labor Department's efforts "more strategic and more targeted" is essential, she said.
Rep. Tom Price (R-GA) asked Horn if Congress needed to clearly define the distinction between independent contractors and employees. "A lot of the rules are in place; they just need to be enforced" Horn replied. "More education for workers on the issue also might be helpful. Employers are well aware when they are doing something wrong."
The Voice of the Masonry Industry
Woolsey concluded the hearing stating that members of the subcommittee will be sending a letter to the Department of Labor requesting details on its current enforcement efforts. She added, if the subcommittee is dissatisfied with the department's response, oversight hearings would follow.
Jessica Johnson Bennett is director of Government Affairs for MCAA. She brings to the Association an extensive background in public affairs and government relations. Her expertise in strategic planning, PAC management and operations help leverage the position of the MCAA on key policy issues that are important to the masonry industry.
Kennison
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May 2007
Masonry
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