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HOME - FACTS - TABLES - VIDEOS - INFOGRAPHICS - AGENCIES - RESEARCH <br />Kelsay, Michael and James Sturgeon. (2011). The Economic Costs of Employee Misclassification in the <br />Construction Sector in the Commonwealth of Kentucky. University of Missouri -Kansas City. <br />Kev Finding: 26% of construction employers in Kentucky were engaged in misclassification. The rate peaked in 2010 with <br />40%. Employee misclassification led to $2 million lost each year to the unemployment insurance system, up to $5 million <br />lost in workers' compensation premiums, and up to $12 million lost in state income tax revenues. <br />Wayne, Richard. (2011). AGC of America's 2011 Labor and Employment Law Symposium: Davis -Bacon Act <br />— Misclassification and Compliance. Hinckley Allen Snyder LLP. <br />Kev Finding: This is a PowerPoint presentation on Davis -Bacon Act and ways to avoid accidental misclassification. <br />Kelsay, Michael and James Sturgeon. (2010). The Economic Costs of Employee Misclassification in the State <br />of Indiana. University of Missouri -Kansas City. <br />Kev Finding: Nearly half (47.5%) of audited employers in Indiana were engaged in misclassification. An estimated 15% of <br />construction workers were misclassified, costing the state $2 million in lost unemployment insurance and $4-$8 million in <br />lost workers' compensation premiums. <br />Canak, William and Randall Adams. (2010). Misclassified Construction Employees in Tennessee. Middle <br />Tennessee State University; Tennessee Technical University. <br />Kev Finding: Between 12,000 and 39,000 construction workers are misclassified or unreported, affecting 11% to 21% of <br />the construction workforce. Losses to state and federal programs were up to $15 million for the state's UI program, $92 <br />million in worker's compensation premiums, $73 million in federal income tax, and $42 million in Social Security funding. <br />Theodore; Nik; Mirabai Auer; Ryan Holton; Sandra Morales-Mirque; Annette Bernhardt; Ruth Milkman; <br />Douglas Heckathorn; James DeFilippis; Ana Luz Gonzalez; Victor Narro; Jason Perelshteyn; Diana Poison; <br />and Michael Spiller ( ). Unregulated Work in Chicago: The Breakdown of Workplace Protections in the <br />Low -Wage Labor Market. University of Illinois at Chicago; Cornell University; University of California, Los <br />Angeles; Rutgers University; Centers for Disease Control and Prevention. <br />Kev Finding: In this 2008 survey data of front-line workers in Chicago, 26% were victims of minimum wage violations, 17% <br />were not paid legally required overtime, and 10% experienced retaliation when complaining or attempting to unionize. <br />20% of injured workers experienced an illegal employer reaction. The average worker in the survey lost 16% of earnings <br />to various forms of wage theft, resulting in $7 million stolen per week in Chicago from low -wage workers. <br />Belman, Dale and Richard Block. (2009). The Social and Economic Costs of Employee Misclassification in <br />Michigan. Michigan State University. <br />Kev Finding: 26% of construction firms misclassified employees. Among those who did so, 19% of their employees were <br />misclassified (i.e., 6% of the entire industry workforce), costing the state over $2 million in UI tax revenue. <br />Government Accountability Office (GAO). (2009). Employee Misclassification: Improved Coordination, <br />Outreach, and Targeting Could Better Ensure Detection and Prevention. <br />Kev Finding: Misclassification of workers enables other forms of wage theft, such as minimum wage theft. These minimum <br />wage violations are investigated under the Fair Labor Standards Act, which does not address misclassification. State <br />officials believe misclassification has generally increased. The Employment and Training Administrations reported the <br />number of misclassified workers uncovered by state audits had risen, but likely underestimated how much. The <br />Department of Labor has generally investigated misclassification indirectly as a result of investigating broader FLSA <br />violations. Recommendations include coordination between federal and state agencies, outreach to workers on proper <br />classification, and a voluntary IRS settlement program that enables employers to correct their misclassifications. <br />59 <br />