How Employer Fraud Is Destroying Our Middle Class


Last September I invited Dan Reilly from the Teamsters to give a continuing legal education talk at the annual conference of the Workers’ Injury Law & Advocacy Group. Dan presented on the topic of employer fraud, and in particular on an increasingly common practice known as misclassification. The video above is just a short clip from an interview we did after his talk. I’ll continue to share more clips from our fascinating conversation on this blog from time to time.

These workers have no benefits, and none of the protections that they should legally have. They simply do not have a safety net.

The term misclassification sounds innocent enough, but in reality it is a growing practice of exploitation that is taking away the rights of working people all across the United States.

Companies like FedEx “misclassify” workers who do the same jobs that full-time employees do by calling them independent contractors. This practice saves companies significant amounts of employee-related costs such as health care, workers’ compensation, unemployment taxes and other benefits.

What misclassification means for these independent contractors is up to 25% less salary than their employee counterparts, no benefits, and the absence of many of the protections that they should legally have. These workers simply do not have a safety net.

Workers do tough jobs like this for corporations every day without benefits or access to workers' comp.

Misclassified workers, or independent contractors are not protected by OSHA or the Americans with Disabilities Act. They have no access to workers’ compensation. This means that if they are injured on the job they have no help from the companies they work for. If they lose their job they cannot collect unemployment.

The people who have been affected by this practice range from FedEx and Sara Lee delivery people, to construction workers, to custodians.

Misclassification is a growing practice that effects workers in almost every industry in America today. Additionally, without health insurance, workers’ comp, or access to unemployment, these workers may end up on Medicaid or welfare, which means the American taxpayer is left footing the bill.

Once again, corporations have bigger profits while working people lose out.

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