Unfortunately, there’s a new trend in employment, and it’s not good news for workers. A combination of payroll fraud and contingent employment are taking away benefits, job security, and wages that American employees would otherwise be entitled to.

The biggest factor at play here is the shift to contingent employment. It’s becoming more popular all over the country, and it’s a term that describes any form of employment outside the typical payroll job with a steady paycheck. Whether it’s contract workers, jobs with strange hours, part time jobs, or temps, working in this capacity reduces worker benefits and protections, exposing these employees to risk.

The Government Accountability Office believes that 42.6 million workers all over the country work on a contingent basis, which represents any working arrangement where the employment is not year-round and full-time employment with one employer. Many argue that this is simply a fact of the new digital economy or the preferences of workers, but there’s an underlying effort by employers to undermine job protections, wages, and the bargaining power of workers.

Work that used to be standard employment has now been shifted into temporary or part-time employment so that employers can get away with not providing benefits. Due to the down economy and high unemployment, workers are in a sense “forced” to accept these positions because there are less opportunities available. Although a lot of this shift can be described as illegal, the laws are so weakly enforced that employers continue to get away with this behavior.

One expert, a professor at the University of North Carolina, says that the increase in contingent work has led to higher numbers of two-income families, round the clock work schedules, and massive job insecurity. Workers are led to believe that they should consider themselves lucky to even have employment, but they don’t always realize that they have lost important job protections in the shift to contingent work. All of these factors are contributing to wider social problems, like racial disparity, political polarization, poverty, and work-family conflicts. Employers might even try to pass off this shift as a positive in the vein of having more time with family. What many workers learn too late is that they are instead scrambling to make ends meet without any of the traditional protections of standard employment.

A key problem in this shift is misclassifying workers as independent contractors. In doing so, workers are deprived of benefits like workers’ compensation, income, and the right to form bargaining units. At the same time, the government also loses out on tax revenues. Sure, some of these independent contractors are highly paid professionals, but too many are underpaid and lose out on crucial benefits they need.

Research indicates that 10.6 percent of the private sector workforce was misclassified. Another study from the U.S. Department of Labor stated that up to thirty percent of employers had improperly classified employees. Of course, some of those instances are true mistakes, especially since the wording of employment conditions can be confusing. However, reducing labor costs has been seen as a positive outcome of classifying workers in this way, since employers don’t have to make contributions to workers’ compensation funds and unemployment insurance.

Finally, misclassification increases the chances for tax evasion, pulling away vital tax dollars from state and federal taxes. Workers get denied overtime premiums and are instead forced to pay taxes that their employers should be responsible for under a standard employment agreement. Of course, they are also left with no recourse in the event of an injury or workplace discrimination. Misclassification has terrible ramifications. If you have been misclassified, you need to seek recourse to protect yourself.

References:

Department of Labor – Employee Misclassification as Independent Contractors

National Conference of State Legislatures – Employee Misclassification

The post The Dangers of Misclassification appeared first on Saenz & Anderson | Attorneys at Law Serving Aventura, FL and Miami-Dade County.