(Wethersfield, CT) – Senator Richard Blumenthal (D-CT) joined representatives of the construction industry and labor today to discuss the serious impacts of the misclassification of employees by companies and legislation he is supporting in the Senate to end this practice that harms both businesses and workers.
“A crackdown on misclassification is long overdue because it does devastating harm to taxpayers, workers and honest businesses,” said Blumenthal. “Calling workers independent contractors when they are really employees costs workers benefits, taxpayers revenue and other businesses a fair opportunity to compete for work.”
Blumenthal is an original co-sponsor of the Payroll Fraud Prevention Act that would protect workers from being misclassified as independent contractors, thereby ensuring access to safeguards like minimum wage and overtime, health and safety protections, and unemployment and workers’ compensation benefits. The bill would also prohibit employers from using misclassification to avoid paying their fair share of taxes.
“The construction industry commends Senator Blumenthal for his steadfast attention to this very important issue. Battling payroll fraud is a perfect example of an initiative that government and industry must continue to work on together,” said Donald Shubert, President of the Connecticut Construction Industries Association. “The negative impact that payroll fraud has on the construction industry is magnified during these difficult economic times. With less work available to bid, combating payroll fraud to create a level playing field is more important than ever.”
“We are grateful that Senator Blumenthal is co-sponsoring the Payroll Fraud Prevention Act. Many states have addressed the problem of payroll fraud disadvantaging law-abiding employers and stealing much needed revenue,” said Matthew Capece, Representative of the General President of the United Brotherhood of Carpenters and Joiners of America. “Connecticut has an impressive track record of labor, employer and bi-partisan support behind initiatives to improve law enforcement. It is time for the federal government to do the same, because what we should be doing is standing up for good employers instead of making excuses for the ones that cheat.”
Misclassification of workers occurs when companies designate employees as independent contractors in order to avoid providing proper wages, taxes, and benefits. This not only adversely affects targeted employees but also creates unfair competition for those contractors that abide by the law. Misclassification also adversely affects the budgets of state and local governments.
Tens of thousands of employers misclassify their employees as independent contractors, and as a result, these workers are not eligible for benefits such as minimum wage and overtime, unemployment insurance, and workers' compensation. Misclassified workers are also not protected by anti-discrimination and health and safety laws.