WASHINGTON, D.C. — When employers improperly classify workers as “independent contractors,” it costs some women up to $10,058 in annual earnings, new research from the 75 Million Campaign and the National Employment Law Project (NELP) finds. The report, How Misclassification Shortchanges Women Workers, analyzes ten occupations where women make up a large portion of workers and misclassification is widespread. These jobs include home aides, childcare providers, house cleaners, janitors, and restaurant servers.
Key findings in the report include:
- Loss of up to 27% of pay: A full-time home aide could lose up to $10,058 of her $36,977 annual compensation if misclassified.
- Immigrant women are heavily affected: Immigrant women make up 54.4% of house cleaners, 41.1% of janitors, and 32.5% of home aides.
- The problem is growing: The number of workers employed as independent contractors rose from 10.6 million in 2017 to 11.9 million in 2023. Prior research estimates that 10 to 30% of employers misclassify workers.
When employers engage in harmful misclassification practices, they avoid paying workers for overtime, paid leave, health insurance, retirement contributions, and their share of Social Security and Medicare. Those costs shift directly onto workers’ full compensation, and independent contractors are barred from joining a union.
“Worker misclassification falls hardest on women, who power many of the economy’s fastest-growing sectors. When their earnings take a hit, the entire economy feels it. That harm is entirely preventable: pay workers what they rightfully deserve,” said report author Janelle Jones, an economist with The 75 Million Campaign.
“The Trump administration is currently working to weaken federal standards that decide who constitutes an employee under key federal workers’ rights laws, a move that leaves the door open for rampant misclassification,” said Cassandra Gomez, Senior Staff Attorney, National Employment Law Project. “This report makes clear that any actions that facilitate misclassification are not only anti-worker, they’re anti-woman.”
The report warns that misclassification compounds the gender wage gap. It falls hardest on women who are already underpaid and are disproportionately Black, Latina, or immigrant workers. It hurts everyone: misclassification affects not just those who are labeled independent contractors. Misclassification pulls down wages for all employees in the same fields.
The full report is available here.
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The 75 Million Campaign is a national movement fighting for the 75 million women in America’s workforce who power our economy. It promotes their rights, wages, safety, and opportunity at work. It exposes extremist attacks on workplace protections and holds policymakers and corporations accountable for advancing substantive economic justice for women.
About NELP: Founded in 1969, the National Employment Law Project (NELP) is a nonprofit advocacy organization dedicated to building a just and inclusive economy where all workers have expansive rights and thrive in good jobs. Together with local, state, and national partners, NELP advances its mission through transformative legal and policy solutions, research, capacity-building, and communications. NELP is the leading national nonprofit working at the federal, state, and local levels to create a good-jobs economy. Learn more at www.nelp.org.
