Teamsters Strongly Support Bill to Crack Down on Misclassification

Widespread practice cheats workers, taxpayers and companies that play by the rules

New legislation to prevent corporations from abusing workers and cheating taxpayers has the Teamsters' strong support, General President Jim Hoffa said Thursday.

The Employee Misclassification Prevention Act of 2008 will make it harder for employers to improperly classify employees as "independent contractors."

"This scam robs 10 million American workers of overtime and benefits," Hoffa said. "Companies are forcing workers to pay for their own fuel, repairs and uniforms by illegally classifying them as independent contractors.

"This 'independent contractor' scam hurts employers that play by the rules," Hoffa said. "It gives an unfair advantage to their competitors that don't play by the rules.

"It also forces taxpayers to make up the difference when employers avoid paying payroll taxes by misclassifying workers," Hoffa said.

The bill is sponsored by Democratic Reps. Rob Andrews of New Jersey, Lynn Woolsey of California, Mike Michaud of Maine and George Miller of California.

Misclassification is a serious problem in the construction and small package delivery industries. It has been spreading to the hospitality industry.

The bill would:

* Require companies to disclose on workers' records whether they are employees or non-employees;

* Require employers to notify workers of their classification and of their right to challenge it;

* Raise penalties for misclassifying workers;

* Require state unemployment insurance agencies to audit employers to identify those who misclassify employees.

"This is a big deal for us," Hoffa said. "Every day we see the misery that workers go through because of this misclassification scam. It's time to end it."