“The Payroll Fraud Prevention Act of 2015 [PDF], introduced by Sen. Robert Casey of Pennsylvania and Sen. Al Franken of Minnesota, would amend the Fair Labor Standards Act to require that workers understand whether they are being classified as an employee or a non-employee contractor, and what the implications are for non-employees in terms of benefits, and legal protections generally afforded to employees.
Workers would also be made aware of their rights to file grievances about their classification, while employers could face penalties for misclassifying workers, or for taking actions against those workers who challenge their status. Misclassified employees would be allowed to seek lost wages and possibly damages.
There are already 50 million American workers classified as non-employee contractors, freelancers, or temporary workers, and the number is expected to grow to 60 million before 2020, meaning nearly 40% of the U.S. workforce would be without access to protections like unemployment insurance, workers’ compensation, and retirement benefits.
The senators sponsoring the bill allege that when companies shift their employee base to “contractors,” they’re forcing the hands of competing businesses to do the same in order to keep their costs down too….”