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<br />Another mechanism to increase the efficacy of state misclassification laws is greater involvement by state
<br />Attorneys General (AGs) and District Attorneys (DAs) (Gerstein, 2021). California, Massachusetts, New
<br />York, Illinois, Michigan, Minnesota, New Jersey, Pennsylvania, Virginia, and the District of Columbia have
<br />dedicated worker protection units within their AG offices that respond to workers' rights issues.
<br />Washington State's AG has also increased its involvement in labor enforcement. These units signal to
<br />employers that labor and employment laws will be enforced. They build connections with the labor
<br />movement and expand educational initiatives about workers' rights and reporting mechanisms for those
<br />most at risk of misclassification (Lawless, 2019; Gerstein, 2020; Gerstein & Wilpert, 2018).
<br />Importantly, Attorneys General can bring criminal prosecution against unscrupulous contractors that
<br />commit illegal misclassification and payroll fraud. If the threshold for wage theft was treated the same as
<br />property theft, 27% of all wage theft cases in 25 states would have been felony cases (Hacker et al., 2023).
<br />New York's Wage Theft Accountability Act, signed into law in September 2023, made wage theft a felony,
<br />allowing prosecutors to charge larceny and to aggregate stolen wage amounts (James et al., 2023). Several
<br />other states have enacted laws that create criminal liability for illegal misclassification (Holt, 2021). In
<br />2021, Pennsylvania's Attorney General recovered more than $20 million in stolen wages for nearly 1,300
<br />construction workers who worked for Glenn O. Hawbaker, Inc. between 2003 and 2018, the largest
<br />prosecution for prevailing wage theft in history (Shapiro, 2021).
<br />Additional state actions can be pursued. Increasing funding for enforcement efforts —for example, by
<br />hiring more prevailing wage compliance monitors and more unemployment insurance auditors, especially
<br />those who speak multiple languages —would make a difference. States can strengthen punitive measures
<br />by enacting larger fines, creating escalating penalties for repeat offenders, and debarring contractors from
<br />winning bids on publicly -funded construction projects. States can also reform labor laws to presume that
<br />workers are employees, with the burden of proving an independent contractor relationship placed on the
<br />employing party (Holt, 2021). These reforms generally include the "ABC test" in which workers are
<br />employees unless three criteria are met: [A] the worker is free from control and direction by the
<br />employing party, [B] the worker performs work outside of the course of the hiring party's typical business,
<br />and [C] the worker is engaged in an independently established trade or businesses aligning with the work
<br />they perform for the hiring party. After Illinois passed the Employee Classification Act with an ABC test,
<br />$1.3 million in penalties against misclassifying employers were generated in 3 years (Casey & Lewis, 2011).
<br />The federal government has proposed updated rules that would make it more difficult for companies to
<br />claim that their workers are independent contractors under the Fair Labor Standards Act (WHD, 2022).
<br />Among other changes, these proposed rules would restore the multifactor, "totality -of -the -
<br />circumstances" analysis to employee or independent contractor status, rescind the 2021 Independent
<br />Contractor Rule, and return to the longstanding interpretation of "economic reality" factors.
<br />The best way to combat wage theft is to expand unionization. When workers have a voice and are
<br />protected by unions, they are more likely to file complaints. Studies have shown that union members are
<br />more likely to be aware of misclassification and be familiar with reporting avenues (Cox, Timm, & Tzintzun,
<br />2009; Construction Industry Tax Fraud, 2021). Additionally, in states with underfunded enforcement
<br />efforts, collective bargaining allows workers to organize for better treatment (Mattera, 2018). Finally, if
<br />passed by Congress, the Protecting the Right to Organize (PRO) Act would amend the National Labor
<br />Relations Act to make misclassification an unfair labor practice that can be federally investigated and
<br />would strengthen the ability of workers to collectively bargain by establishing stiffer penalties on
<br />employers for violating labor law and by invalidating anti -union state laws (Rhinehart et al., 2021).
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