Regarding your “Contract to Cheat” series:
The widespread practice of misclassifying employees as independent contractors in the construction industry is no surprise to the sheet rockers, painters, carpenters and others who work on North Carolina’s construction sites. Misclassifying workers occurs when employers designate full-time employees as “independent contractors” to avoid paying benefits.
At the Workers’ Rights Project at the N.C. Justice Center, we see these and other abuses all too often. Every week, we are contacted by workers in construction – and also those in restaurants, dry cleaners and many other industries – who have not been paid for work they have performed.
Often it’s only after they contact a lawyer or the Department of Labor for help that they learn that they’ve also been cheated in another way: by being misclassified. This robs them of benefits they worked hard to earn.
This isn’t right. The Contract to Cheat series did an admirable job of identifying the problems. Indeed, there are many fixes that could and should be put into place at the federal level.
But North Carolina lawmakers and agencies could go a long way toward ensuring that workers are treated more fairly:
• Legal presumption. First, the legal presumption should always be that a person who provides labor or services for a fee is an employee. Employers that treat their workers otherwise should bear the burden of proving why the independent contractor classification is correct. Workers should be informed at the time of hire how they are being classified.
• Litigation: Misclassified workers should be provided an opportunity to sue their employers to recover the benefits denied to them and protected from retaliation should they come forward. Employers who misclassify their workers should face penalties stiff enough to offset the considerable economic advantages they gain by misclassifying.
• Support for injured workers: The Department of Labor could be allowed to issue stop work orders against employers who wrongfully don’t carry workers’ compensation coverage for their employees. The state should set up a fund to compensate workers whose employers wrongfully fail to carry the insurance. And ghost workers’ compensation insurance policies – those that fail to provide meaningful coverage for employees – should be outlawed. Colorado requires construction contractors to provide workers’ compensation coverage to everyone onsite, a forward-thinking measure that North Carolina should consider.
• Agency support: There are numerous state agencies charged with investigating misclassification, including the Division of Employment Services, the Department of Revenue, the Industrial Commission and the Department of Labor. These agencies should – as proposed by Gov. Perdue’s Task Force on Misclassification – share information about employers who misclassify workers. And there is room for cooperation between state and federal agencies as well.
As your series showed, workers should have what they’ve rightfully earned and the state of North Carolina would benefit from the increased revenue. We see an abundance of solutions that North Carolina could choose to address this persistent problem.
Attorney, Workers’ Rights Project of the N.C. Justice Center