In recent years, governmental agencies and courts have tried to decide if workers are employees or independent contractors. Now a provision in President Obama’s 2011 federal budget request targets the issue.
Obama wants $25 million for the Department of Labor to add 100 enforcement employees and competitive grants to boost states’ ability to address misclassification.
Classification is not a black and white issue, not even to the Internal Revenue Service. ”There is no ‘magic’ or set number of factors that ‘makes’ the worker an employee or an independent contractor, and no one factor stands alone in making this determination,” the IRS states on its website.
On Dec. 15, Sen. John Kerry (D-Mass.) introduced a bill aimed at reducing the misclassification of workers as independent contractors. The Taxpayer Responsibility, Accountability, and Consistency Act, or S. 2882, was referred to committee with six co-sponsors. A companion bill, H.R. 3408, was referred to committee July 30 with 28 co-sponsors.
The National Employment Law Project reported that between July 2008 and June 2009, at least eight states enacted statutes aimed at independent contractor problems and 20 state legislatures introduced bills on the subject.
Governmental bodies often eye the construction industry for misclassification, but the trucking business also draws examination. For example, the Minnesota legislature referred to committee a bill to create a definition of independent contractors for trucker owner-operators.
Many employee-contractor arguments occur in California. On Feb. 4, state Attorney General Jerry Brown announced victory against five trucking companies after beginning a crackdown on carriers serving Long Beach and Los Angeles ports 18 months earlier.
