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WWE Audited for Employee Misclassification

September 16, 2010

In recent news, the State of Connecticut has been investigating the World Wrestling Entertainment (WWE), to determine if the WWE cut costs by engaging in employee misclassification--by improperly using independent contractors instead of employees both in the spotlight, and behind the scenes.

According to an article in the Connecticut Post, that our Santa Ana employment attorneys have been following, WWE has been criticized for not offering the company's wrestling stars health insurance. Linda McMahon, former CEO of her family's wrestling company, and a current candidate for the U.S. Senate, argued that the WWE stars are independent contractors. But WWE also reportedly employs around 350 other independent contractors who work behind the scenes, and include photographers, models and film unit publicists.

As our Orange County employment attorneys have reported in a recent blog post, federal and state officials have been recently cracking down on companies who engage in the misclassification of employees, to avoid paying overtime, Social Security, Medicare, and other employee benefits. According to Connecticut's Joint Enforcement Commission on Employee Misclassification, employee misclassification is a serious problem, and although it can happen mistakenly, more often than not, it is used by companies to skirt employment laws. In a report from earlier this year, the commission also stated that employee misclassification can result in mistreating workers, giving the company an unfair advantage by lowering the cost of business, and cause taxpayers to cover more of the tax burden.

Earlier this year, Governor M. Jodi Rell, reportedly signed legislation that increases the penalties for companies who misclassify independent contractors. Governor Rell increased the amount from $300 per incident to $300 per day beginning on October 1 of this year--with the potential to be a felony.

WWE was also reportedly sued by three wrestlers a few years ago, where they accused the company of misclassifying them as independent contractors. According to the WWE, performers are treated well, earning over $550,000 per year for wrestling less than three days per week on average. The company claims to cover all costs that are associated with rehabilitation or injuries that happen in the ring. Robert Zimmerman, WWE Spokesman claimed that WWE has never been fined in the past for independent contractor classification, and that the company is always reviewing their employment practices and procedures to comply with the laws that continually change.

In cities throughout Orange County, California, contact Howard Law, PC today.

WWE: State Auditing Company for Misclassification of Employees, The Connecticut Post, September 15, 2010

Related Web Resources:

Brown Introduces Employee Misclassification Prevention Act in Senate, California Employment Lawyers Blog, March 3, 2010

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

Connecticut's Joint Enforcement Commission for Worker Misclassification