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HOME — FACTS — TABLES — VIDEOS — INFOGRAPHICS — AGENCIES — RESEARCH <br />Erlich, Mark. (2020). "Misclassification in Construction: The Original Gig Economy." Industrial and Labor <br />Relations Review, 1-29. <br />Kev Finding: The misclassification of workers as independent contractors has predated the app-based gig economy, <br />particularly in construction where a cash -based underground system of compensation has lowered standards and been <br />among the major causes of the decline of union density. <br />Moe, Lina; James Parrott; and Jason Rochford. (2020). The Magnitude of Low -Paid Gig and Independent <br />Contract Work in New York State. The New School. <br />Kev Finding: 17.5% of low -wage independent contractors in New York worked in construction. The Immigration Reform <br />and Control Act requires employers to verify each employee's eligibility to work in the United States to ensure that they <br />are accounted for in payroll taxes and insurance coverage. Independent contractors, however, do not need their eligibility <br />verified, allowing employers to hire undocumented workers and deprive them of benefits and insurance coverage. <br />Gerstein, Terri. ( ). Workers' Rights Protection and Enforcement by State Attorneys General: State AG <br />Labor Rights Activities from 2018 to 2020. Economic Policy Institute. <br />Kev Finding: In Washington, D. C., Massachusetts, and New York, state attorneys general have established offices to focus <br />on labor rights. Cases brought against employers for misclassification have generated multiple millions in settlements. In <br />total, 8 states plus D.C. had units within AGs offices dedicated to workers' rights at the time of this study. <br />National Employment Law Project (NELP). (2020). Independent Contractor Misclassification Imposes Huge <br />Costs on Workers and Federal and State Treasuries. <br />Kev Finding: State -level studies have shown an increase in employee misclassification but are likely underestimating its <br />true scope. Construction is one of the most affected industries, with misclassification being 7 percentage points higher in <br />construction than other industries in certain states. Includes a table of estimated losses to tax revenue. <br />Erlich, Mark and Terri Gerstein. (2019). Confronting Misclassification and Payroll Fraud: A Survey of State <br />Labor Standards Enforcement Agencies. Harvard Law School. <br />Kev Finding: State agencies reported they are constrained from abandoning complaint -based enforcement in favor of <br />proactive enforcement due to statutory mandates and historical tradition. Additionally, limited resources prevent state <br />agencies from being able to take proactive action except for in industries where misclassification is a known problem. <br />Audits have been becoming more targeted rather than random for agencies administering unemployment insurance. <br />Agencies have started using stop -work orders in cases where violations are found. When stop -work orders are issued, <br />corrective action is taken, and the reported turnaround is roughly a day and a half. In response to misclassification <br />enforcement, some companies pay employees in cash. Agencies are relying more and more on community partnerships <br />with unions, worker centers, and immigrant rights groups to investigate employers. <br />Waddoups, Jeff; Kevin Duncan; and Russell Ormiston. (2019). Payroll Fraud in Nevada's Construction <br />Industry: Extent and Fiscal Impact. University of Nevada, Las Vegas; Colorado State University -Pueblo; <br />Allegheny College. <br />Kev Finding: Across Nevada, 11% of the state's construction workforce was either misclassified or working off -the -books <br />in 2018 (and 14% when excluding white-collar workers). These illegal labor practices likely reduced labor costs of offending <br />contractors by over $90 million; these costs are borne directly by workers and taxpayers. <br />Xu, Lisa and Mark Erlich. (2019). The Economic Consequences of Misclassification in the State of <br />Washington. Harvard University. <br />Kev Finding: This analysis of wage theft in Washington in 2017 found a rate of worker misclassification of 19% and <br />estimated a $48 million cost to the state government and $85 million cost to the federal government annually. <br />Thomason, Sarah; Ken Jacobs; and Sharon Jan. (2019). Estimating the Coverage of California's New AB 5 <br />Law. University of California, Berkeley. <br />Kev Finding: Estimates that 91% of independent contractors in California would have been classified as employees under <br />the ABC test in California's Assembly Bill No. 5. <br />53 <br />