CLEVELAND (April 23, 2010) — U.S. Sen. Sherrod Brown (D-Ohio) has introduced legislation that would scrutinize more closely whether a worker is an employee or an independent contractor.
The Employee Misclassification Protection Act would require employers to keep records that reflect the accurate status of workers, and it would increase penalties on employers that misclassify employees and violate employees' overtime and minimum wage rights. The new law also would mandate states to conduct audits to find misclassified workers.
Employers sometimes illegally classify employees as independent contractors to avoid paying Social Security and Medicare taxes and unemployment compensation and other benefits.
The Ohio Democrat planned a news conference for yesterday afternoon in Washington, D.C., to discuss the legislation. He planned to cite a study by Ohio Attorney General Richard Cordray that suggests Ohio loses at least $160 million a year because of misclassified employees.
This report appeared in Crain's Cleveland Business magazine, a sister publication of Tire Business.