The Hill: Voters Want Government to Act Against Mischaracterization of Employees

While the ire evoked this election season will, hopefully, soon recede, what’s unlikely to ebb is the public’s anger at how corporations are rigging the game to boost profits and executive pay at the expense of working people.

A first-of-its-kind poll released by the National Employment Law Project offers insight into this anger—this sense that corporations and CEOs are largely responsible for the economic woes facing workers. Only 3 in 10 voters say they trust employers to treat their workers fairly. More than half believe that companies’ lack of loyalty to their workers is a serious problem today.

Contributing to this economic insecurity is the fact that companies, instead of hiring people as employees (with all the attendant benefits of employee status), are calling their workers “self-employed” or “independent contractors,” often illegally, as a way of increasing profits and passing their labor costs onto the workers themselves.

A whopping 84 percent of voters—Republicans and Democrats, older and young—bristle when corporations illegally misclassify employees as “independent contractors,” depriving them of any labor rights and protections. For these workers, that means no minimum wage, no compensation for work-related injuries, no health and safety protections, and no benefits. More than three-quarters of Americans want our leaders to do something about it.

Two in three voters we surveyed say they’re familiar with the corporate strategy of misclassifying workers as independent contractors instead of employees. Maybe they’ve seen all the news stories about this unfair and illegal practice:

  • Last June, FedEx agreed to pay $240 million to settle driver complaints that it had illegally labelled them “independent contractors,” thereby saving itself up to 30 percent of payroll costs and undercutting its rival UPS (which properly treats its drivers as employees).
  • The retail giant Amazon reclassified some of its Prime Now delivery drivers after being sued for misclassifying them.
  • Earlier this month, the National Labor Relations Board issued a complaint against the on-demand food delivery service Postmates for illegally classifying its workers as “self-employed.”
  • This month, the New York State Department of Labor found that two Uber drivers are “employees” under that state’s unemployment compensation law, joining agencies in California, Alaska and Oregon that have made similar findings under their unemployment or workers’ compensation laws.
  • And the “big rig” drivers who carry shipping containers from port to railhead and warehouse have won millions in back pay against companies that illegally called them “independent contractors.”

The list goes on, and includes cable installers, homecare workers, janitors, and workers from many other sectors. And of course, these are only the companies that got caught.

No wonder our polling shows that 7 in 10 voters don’t trust employers to treat their employees fairly. A majority of voters believes that working hard isn’t enough anymore, because companies simply aren’t loyal to their employees. The strategy of hiring workers as contractors, even if lawfully done, is still offensive to most of us. By 78 percent to 12 percent, voters feel that workers are better off as direct employees than as independent contractors.

Voters want solutions for worker misclassification, and they have clear ideas about what they should be. More than three in four favor policies that make it harder for companies to classify workers as independent contractors and increased fines and penalties for companies that do so illegally.

Fortunately, policy models already exist. A number of states have clarified their definitions of “employee” to stop companies that would rather not pay their taxes or abide by minimum labor standards. At least 19 states have state-level task forces that have begun to take on misclassification, and the U.S. Department of Labor has agreements with more than half of the states to tackle misclassification together.

Policymakers should take heed. Cash-strapped state and federal agencies need more resources to go after misclassification, create a level playing field for businesses that have to compete with scofflaws, and collect the taxes that insure workers against injury or joblessness. No matter what the election outcome is, no matter which party controls the White House or the state house, voters of all stripes—liberal, conservative, young and old—want them to take on worker misclassification.

Rebecca Smith is deputy director of the National Employment Law Project.

Read the original op-ed at The Hill’s Congress Blog.

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Rebecca Smith

Director of Work Structures, National Employment Law Project

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