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Labor Unions Back Employment Misclassification and Payroll Fraud Legislation

May 5, 2011

According to recent employment news, labor unions and the construction industry in Connecticut are coming together to support Senator Dick Blumenthal's (D-CT) part in co-sponsoring the new Payroll Fraud Prevention Act that aims to put a stop to employment misclassification.

As our Riverside, California employment attorneys have previously discussed, employment misclassification is a nationwide problem, where employers often misclassify workers as independent contractors, or "exempt" from overtime laws, when they are actually employees.

Many employers use employee misclassification to avoid paying minimum wage, overtime, or social security and Medicare taxes, and unemployment compensation, among other employee benefits. In other cases employers misclassify employees to have an unfair advantage by underbidding their competitors to take away their jobs.

The topic of employee misclassification came up last year during the Connecticut senate campaign with candidate Linda McMahon, the former CEO of her family's wrestling company, World Wrestling Entertainment (WWE). McMahon and WWE were investigated for engaging in employee misclassification--by classifying workers as independent contractors instead of employees both in the ring with star wrestlers, and behind the scenes.

In the debate, that our attorneys discussed in a Chino Hills, California employment lawyer blog, McMahon argued that the WWE star wrestlers are independent contractors and not employees. But the question remained whether the other reported 350 independent contractors who work for the WWE in many capacities behind the scenes, were actually employees, and therefore entitled to wage and hour benefits under the FLSA.

Our Santa Ana, California employment and labor attorneys represent employees who have experienced violations of the Fair Labor Standards Act, as well as California Labor Codes in Orange County and throughout Southern California. For a free consultation about your wage and hour rights, contact our attorneys today.

Cracking down on worker classification, News 8/, April 25, 2011

New 'Payroll Fraud' bill targets worker misclassification, HR Morning, April 25, 2011

U.S. Sen. Harkin: Introduces legislation to prevent payroll fraud, protect workers' rights, and level playing field for employers, Iowa Press Release, April 11, 2011

Sens. Harkin, Brown, Blumenthal Introduce Legislation to Prevent Payroll Fraud, Protect Workers' Rights, and Level Playing Field For Employers, Tom Harkin Iowa's Senator Press Release, April 11, 2011

U.S. Senate: HELP Committee Hearings

Related Web Resources:

California Department of Industrial Relations (DIR): The Division of Labor Standards Enforcement

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Related Blog Posts:
New Act to Combat Employee Misclassification and Payroll Fraud, California Employment Lawyers Blog, May 4, 2011

Senator Harkin Introduces Payroll Fraud Prevention Act in Congress, California Employment Lawyers Blog, April 28, 2011

New State Legislation Holds Employers Accountable for Employee Misclassification, California Employment Lawyers Blog, October 25, 2010