From Progressive Democrats of America, David Moberg talks about the recent Administrator’s Interpretation and its importance. David writes:
“Last week, the administrator of the Department of Labor’s Wage and Hour Division, David Weil, released a “letter of guidance” that clarifies who is an employee and who is an “independent contractor”—that is, essentially an individual running his or her own business. He argues that the most definitive statement from Congress comes from the Fair Labor Standards Act, which says that “to employ” means “to suffer or permit to work.” And, he concludes, “under the Act, most workers are employees.”
The decision is “incredibly important,” says Catherine Ruckelshaus, general counsel and program director of the National Employment Law Project (NELP), a pro-worker nonprofit organization, and may help to clear up confusion in the courts and encourage more enforcement of the law.
In recent years, many companies—from 10 percent to 30 percent or more of employers—employ at least several million people who are misclassified as independent contractors, according to a recent NELP report. They even go so far as to require workers to form a limited liability corporation or franchise (with themselves as the one and only participant) or to sign contracts declaring that they are independent contractors. According to another study from economist Jeffrey Eisenach of George Mason University, the number of independent contractors rose by one million from 2005 to 2010, including both fake and real contractors (often unemployed workers who re-label themselves as “consultants”)….”
Read the full story at DOL Decision Could Mean the End of Wage Theft Through “Independent Contractor” Misclassification.