A very interesting article was recently posted in the New York Times Op-Ed about the rampant problem of misclassifying employees as “independent contractors.” The article highlights the costs and repercussions of misclassification. By labeling workers as “independent contractors” employers “avoid paying taxes and providing benefits that are guaranteed to employees, such as workers’ compensation, overtime pay, minimum wage and unemployment insurance.” The United States Department of Labor (“DOL”), the federal agency that enforces the Fair Labor Standards Act, estimated that up to 30 percent of employers misclassify workers. The DOL also estimates that Social Security, Medicare, unemployment insurance and workers’ compensation lose billions of dollars in revenue due to misclassifications.
