Lawmakers and regulators are signaling that this year may bring a crackdown on employers who misclassify workers as contractors or freelancers, when in fact their tasks are identical to regular employees.
"Misclassification" of workers became a hot issue last year after Georgia-based Hibachi Grill & Supreme Buffet was hit with a $2 million lawsuit for misclassifying restaurant servers as independent contractors. The U.S. Department of Labor filed several other, similar lawsuits in 2013, under provisions of the Fair Labor Standards Act.
In addition, the Payroll Fraud Prevention Act of 2013 was introduced in November by Sen. Bob Casey, D-Pa. The proposed legislation would require businesses to notify workers of their status as employees or non-employees and doubles the penalties for noncompliance with FLSA. Co-sponsoring the bill were Democratic senators Richard Blumenthal Sherrod Brown, Al Franken, Tom Harkin and Elizabeth Warren.
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