As of last week you can add Oregon to the growing list of US states who have signed a memorandum of understanding with the US Department of Labor (DOL) to combat workers’ misclassification as independent contractors or other non-employee statuses.
By signing a three-year agreement, the Oregon Bureau of Labor and Industries and the US Department of labor’s Wage and Hour Division will provide outreach and education to employers, employees, and other stakeholders; share resources; and enhance enforcement by conducting coordinated investigations and sharing information consistent with applicable law. Their ultimate goal is to enforce applicable laws and protect workers from misclassification.
The US Department of Labor also works with the IRS and has now made similar agreements with 28 other states to combat employee misclassification and to ensure that workers get the wages, benefits, and protections to which they are entitled. Mislabeling employees as independent contractors can deny them of basic rights such as minimum wage, overtime and a host of other benefits. Misclassification also reduces federal and state tax revenues, and prevents contributions to state unemployment insurance and workers’ compensation funds.
“The Wage and Hour Division continues to attack this problem head on with a combination of a robust education and outreach campaign and a nationwide, data-driven, strategic enforcement across industries,” said David Weil, US Department of Labor Wage and Hour Division administrator. “Our goal is always to strive toward workplaces with decreased misclassification, increased compliance, and more workers receiving a fair day’s pay for a fair day’s work.”
“When corporations misclassify their workforce, they make it much more difficult for workers facing wage theft, civil rights abuse or other unfair treatment on the job.” According to Brad Avakian, Oregon Bureau of Labor and Industries Commissioner. “This agreement will create a new tool to help protect the rights of Oregon workers cheated on the job.”
Many organizations rely on contingent workers to get vital work done. With more workers choosing to work independently and more companies wanting to use flexible workers (such as freelancers, consultants, and independent contractors) for project work, worker misclassification enforcement is a growing area of concern. Businesses don’t want to run afoul of complex and sometimes contradicting federal and state regulations.
The reality of the current regulatory and employment landscape is that independent contractor status is still perfectly legal and acceptable, so long as you do it right. Independent Contractor Compliance and Engagement experts, like TalentWave, can help build a comprehensive IC engagement program enabling a client company to attract and retain talent, including independent contractors, while mitigating the risks and streamlining the process.
More information on independent contractor misclassification and the DOL enforcement effort are available at http://www.dol.gov/misclassification/.
“ Wikipedia” by State of Oregon