Secretary of Labor Hilda L. Solis today signed an agreement with the IRS and nine state agencies to “improve departmental efforts to end the business practice of misclassifying employees in order to avoid providing employment protections.”
A Department of Labor press release adds that “signatory states are Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah and Washington. Secretary Solis also announced agreements for the Wage and Hour Division to enter into memorandums of understanding with the state labor agencies of Hawaii, Illinois and Montana, as well as with New York’s attorney general.”
The Miami Herald reports that “the information will help Labor officials target businesses that improperly label workers as independent contractors or as non-employees to deprive workers of minimum wage and overtime pay. Misclassifying workers also lets companies avoid paying workers compensation, unemployment insurance and federal taxes.”
The Herald adds that the Department of Labor “has focused on industries where so-called ‘wage theft’ is considered a problem, including the hotel, restaurant, janitorial, health care and day care industries,” adding that “last month, the agency began targeting large U.S. homebuilders to see if they failed to pay workers the minimum wage or overtime.”
The Florida Independent reported late last month that at least 50 construction workers who had worked 10 hours or more a day on a Broward County affordable housing project had not received their wages for anywhere from three weeks to two months. The general contractor and two companies involved in the project said it was not their responsibility to pay the workers.
Cynthia Hernandez, a research associate at the Research Institute on Social and Economic Policy at Florida International University, has extensively studied wage theft wrote in an email to the Independent that practices like those alleged by the Sunrise workers is “very common”:
Small contractors to even large corporations like Wal-Mart and Toys-R-Us have used this method to not pay employees. It happens a lot in construction because there are so many different levels of contractors and subs, which make it even harder for the worker to identify ultimately who is responsible for their pay. I have even heard of sub-contractors (employers) who have been stiffed out of their cut by contractors and as a result, have been late or unable to pay their employees. Until we can actually get some enforcement, this will continue to happen.
After workers reported the situation to the Independent and sought legal help, about 60 men, after weeks of being stiffed out of their wages, were paid with checks issued by Florida Shell Construction at the worksite.