Last week, the U.S. Department of Labor issued guidance for classifying employees and contact workers. Though the interpretation does not change the law, it does provide clarification for employers when it comes to determining how to classify workers.
Worker misclassification is a growing problem across the country, and one that many employers use to cut costs. If you believe that you have been wrongly cheated of your rightful level of compensation by your employer, call theemployment lawyers you can trust to defend your rights.
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The interpretation comes after growing concerns from workers’ advocates claiming that companies are misclassifying employees as a cost saving measure by not having to pay for workers’ compensation insurance, unemployment insurance, overtime pay or payroll taxes.
The document reminds employers of the definition of employ under the Fair Labor Standards Act, which broadly means to suffer or permit to work. Under this correct interpretation, most workers should be considered employees.
It encouraged employers to use the economic realities test to determine if a worker is economically dependent of the company or if they are in business for themselves, in which case they could be considered an independent contractor.
Although it is difficult to determine the number of misclassified workers in the country, state-level studies reveal that between 10 and 20 percent of employers misclassify at least one worker. Studies also reveal that the practice is most common in industries like construction where the cost for workers’ compensation insurance is high and continuing to grow.
Our attorneys are continually investigating cases in which employers are taking advantage of Illinois workers through misclassification and other means of abuse. We can help you get the justice you deserve.