CWS 3.0: January 23, 2013

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DOL Misclassification Study in Works

The U.S. Department of Labor announced earlier this month in the Federal Register that it is seeking comments on an upcoming study on misclassification of workers as independent contractors.

It aims to look into whether workers have knowledge of their employment classification and whether they understand the implications of their status, according to the Federal Register.

It’s the first time the department will field such a study.

Budget for the study is almost $1.9 million. It seeks to interview 10,060 workers and more than 100 executives, according to the Federal Register.

The department cites several incentives in the Federal Register for the government to be concerned about independent contractor misclassification:

  • The loss to unemployment insurance revenue if 1 percent of all workers were misclassified as ICs would be $200 million annually.
  • States report losing between $5 million and $10 million annually on unemployment insurance because of IC misclassification.
  • Since 2009, Department of Labor Wage and Hour investigators have collected more than $29 million in back wages for more than 29,000 employees who were misclassified.

Law firm Pepper Hamilton discusses the study in more detail.

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