Joyce Goldstein & Associates lawyer Joyce Goldstein joined the AWF Union Podcast earlier today to discuss how misclassifying workers is damaging to workers and causes them to miss out on pay and benefits.
Workers are classified as either independent contractors or employees of an organization and this determines what types of benefits or pay that they will be receiving for their work. An employee would receive workers compensation, have benefits given to them by their employer, make an established wage, have the right to collectively bargain and much more. An independent contractor would not be eligible to receive any benefits. They are paid differently, usually lower wages, no healthcare provided by employers and would have difficulties attempting to collectively bargain.
Goldstein said that some companies will classify their workers as independent contractors so that they can get out of paying them a fair wage and other benefits that they would be entitled to. This is a way for companies to cheat their way into paying workers less.
One major reason as to why this is such a difficult thing to change is because of the various definitions of what an independent contractor and employee are. According to Goldstein, the NLRB’s definition is different from the Department of Labor’s definition and theirs is different from the IRS’s definition of the two. This causes confusion across the board and allows employers to cheat the system.
Goldstein said that this needs to be addressed with labor law reform. There needs to be a universal definition between the two, to make it more clear and fair for the workers.