California recently joined 11 other states that are working with the U.S. Department of Labor (DOL) to reduce the number of employees who are misclassified as contract workers.
In 2011, the DOL collected $5 million in back wages for minimum wage and overtime violations because employees had illegally been treated as independent contractors. Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington are the other states that have signed agreements with the DOL to eradicate this behavior.
The Orange County Register notes that it comes down to an "issue of fairness." Workers are being underpaid and missing out on benefits, while law-abiding businesses struggle to compete with companies that don't follow the rules.
"The misclassification of employees as something else, such as independent contractors, presents a serious problem, as these employees often are denied access to critical benefits and protections – such as family and medical leave, overtime compensation, minimum wage pay and unemployment insurance – to which they are entitled," said the DOL in a statement.
The initiative to prevent such tactics was initially spurred by Vice President Joe Biden's Middle Class Task Force, which aims to prevent, detect and remedy employee misclassification.
