Misclassification of workers as independent contractors is a problem nationwide. A misclassification of employee status prevents workers from attaining workplace benefits to which they may be entitled.
Recently, Idaho signed a memorandum of understanding with the U.S. Department of Labor to collaborate to identify businesses that engage in this illegal activity and to stop the misclassification of independent contractors. This latest move to protect workers brings Idaho in line with 23 other states that have similar agreements in place.
Those states are: Alabama, California, Colorado, Connecticut, Florida, Hawaii, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New York, Rhode Island, Texas, Utah, Washington, Wisconsin and Wyoming. The issue that prompted revamped legislation is that state and federal agencies need to know with certainty what actual benefits and protections are accorded to an employee, such as family medical leave, employment taxes, meal and break periods, overtime pay and minimum wage.
If a worker is misclassified,the business cheats the government out of legally mandated taxes and cheats workers out of legally mandated protections. Misclassification of a worker is a benefit for a company until it gets sued or reported and investigated. It is actually less expensive for the company to strictly comply with the labor laws of each state, or make it their priority to find out what those laws say, rather than be sued and have the court award a higher amount than may actually be owed.
If companies are allowed to get away with misclassifying workers, they also unfairly affect the tenor of the industry in which they compete. It is an unfair and illegal advantage to misclassify workers to get a competitive pricing edge to obtain more clients. Enforcement of stated labor laws protecting workers is the priority of states seeking to level the playing field and protect workers.
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