Dive Brief:
- Nebraska has become the 34th state to sign a three-year Memorandum of Understanding intended to protect employee rights by preventing their misclassification as independent contractors, according to the U.S. Department of Labor.
- With the agreement, the Nebraska Department of Labor and Labor Dept.'s Wage and Hour Division will "provide clear, accurate and easy-to-access outreach to employers, employees and other stakeholders; share resources; and enhance enforcement by conducting coordinated investigations and sharing information consistent with applicable law."
- The Wage and Hour division is also working with the IRS and 33 other states in labeling employees as something they are not (i.e., independent contractors), which can deny workers minimum wages, overtime and other benefits. In addition, misclassification wrongly lowers tax revenues to federal and state governments, and creates losses for state unemployment insurance and workers’ compensation funds, according to the Labor Department.
Insight
David Weil, administrator of the Wage and Hour Division, said resolving this situation requires the right blend of education and outreach, along with national data-driven, all-industry strategic enforcement. "Our goal is always to strive toward workplaces with decreased misclassification, increased compliance, and more workers receiving a fair day’s pay for a fair day’s work," he said.
By now, HR leaders and executives in the private sector should have a a very strong idea of whether or not they are classifying their employees properly based on Labor Dept. guidelines, which are have been available for more than a year.
