As you’re probably aware, the U.S. Department of Labor has been concentrating the past several years on the issue of worker misclassification — when organizations classify workers as “independent contractors” for payroll purposes, but treat them like employees when it comes to working conditions.
Now, the DOL is proposing to conduct a survey to find out how aware workers are of the situation. Here’s their concern:
Worker misclassification can be understood as the practice, intended or unintended, of improperly treating a worker who is an employee under the applicable law as in a work status other than an employee (i.e., an independent contractor). As a result, employees are deprived of their legal wage entitlements, including minimum wage and/or overtime, as well as programs like unemployment insurance and workers’ compensation, because such programs generally apply only to “employees” rather than workers in general. Federal labor laws do not require employers to inform workers of their employment status (whether the worker is an employee or not), the basis for their status determinations, or pay (including hours worked, pay rates, and wages paid). As a result, workers may not be prepared for the consequences of misclassification.
Why does the DOL care about this?
If you want to know why this matters, consider this: The GAO estimates that unpaid taxes total more than $2.7 billion dollars per year in unpaid Social Security, unemployment insurance, and income tax due to misclassification. Wow. No wonder they’ve been spending so much time and effort on this issue.
So, basically, they want to survey about 10,000 workers “to collect information about employment experiences and workers’ knowledge of basic employment laws and rules so as to better understand employees’ experience with worker misclassification.” My guess is they’ll want to use this information to better tailor their educational and compliance reporting programs to workers’ level of understanding.
In addition to surveying they workers, they also want to conduct in-depth interviews with 100 business executives to assess their “knowledge, attitudes, and practices around classifying workers.”
But first, they want to know what you think
So, before they jump into this thing, they’re seeking comments from us out here in the business world regarding this proposed survey. Specifically, they want to know:
- Whether you think this information will be of practical use to the agency in the performance of its assigned functions,
- Whether you think the agency’s estimates of how much it will cost and how long it will take to perform the survey are reasonable,
- If you have any suggestions to make the survey clearer or more useful,
- If you have any suggestions to make the information gathering faster or easier.
You can read the entire Proposed Information Collection Request here, including instructions for how to submit your comments. Any comments must be submitted on or before March 12, 2013.