Senator Warren Says Independent Contractors “Might” be a Problem

A report from The Hill shows Elizabeth Warren being cautious and careful after answering a question about the proliferation of independent contractors, otherwise known as “1099 employees” (an oxymoron if there ever was one) across the country.   As The Hill reports:

The topic came up during an on stage appearance at a conference produced by news organization Re/Code, when a BuzzFeed News reporter asked whether “1099” workers, named after the tax form they fill out as contractors, should instead be seen as more traditional workers for the many startups that rely on their labor.

Warren didn’t answer, but she did express concern about the way companies in general are using their contractors.

“I think there is evidence that increasingly employers use independent contractors not in ways that were originally intended but in ways that permit them to treat employment laws differently than they otherwise would be responsible for, and I think that’s a real problem,” she said. “And I think the Department of Labor is looking into this and I think they’re right to do that.”

It was not clear what Department of Labor investigation she was referring to, though the agency does run investigations into whether employers are misclassifying their employees as contractors.

The facts show though that Warren should have no hesitation to call out what has become a major economic problem across the country.  While Republicans claim that the social security system might fall short in the future what they fail to explain is the only way in which that could happen; through lack of current pay-ins to the system because workers and employers across the country have failed to pay into the system.

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Picture of a NH UBC banner line conducted last year in Seabrook shaming a large tri-state drywall firm for their labor practices. See more at: Carpenters Get Hot on Cheating Contractors

Social security, workers compensation and payroll taxes all fall under protections given to the workers that employees and employers jointly pay into.  All of these programs act as insurance against lost time due to work injuries, lay off periods and a savings program to offer some means of subsistence when either one suffers disabling injury or is too old to work.  While the last two social security programs fall under different lines of qualification and management, the fact remains that their intention was to protect workers and the disabled from abject poverty.

Under federal labor law certain criteria exist to judge a worker as an independent contractor or as an employee. Unfortunately many workers do not know their rights and believe what unscrupulous employers tell them.  This isn’t anymore prevalent than in the construction trades where according to a study done by the National Employment Law Project, estimates place misclassification as high as 30% across the board in all employment.

In New Hampshire the issue is particularly contentious as labor leaders such as the United Brotherhood of Carpenter’s Joe Donahue struggles with the issue in the construction field as profiled in this 2014 report by New Hampshire Business Review.  In the report Donahue and others point to the confusion about employee classification due to conflicting and confusing regulations on the federal and state level.  Unfortunately the September 2014 summary of the New Hampshire Join Agency Task Force on Employee Misclassification Enforcement isn’t naming any significant increases in enforcement over years past.

In addition to construction other industries seem rife for misclassfication issues as well including hotel workers, IT workers, landscape and others that typically operate out of the public eye and under the supervision of smaller, employers that have sub-contractor relationships with larger, more public companies.

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