Democrats are looking to protect low-wage workers who are misclassified as independent contractors so their companies don’t have to pay them as much.
The issue of misclassified workers — who are often denied minimum wage, overtime pay and other benefits offered to full-time employees — is part of a larger debate over income inequality.
The Labor Department is making strides to combat what it sees as a growing trend of misclassified workers, and now congressional Democrats are getting involved.
The Payroll Fraud Prevention Act, introduced Wednesday by Rep. Frederica WilsonFrederica Patricia WilsonDemocrats scramble to satisfy disparate members on spending package The Memo: Biden's immigration problems reach crescendo in Del Rio Frederica Wilson rails against Haitian deportation flights, calls treatment 'inhumane' MORE (D-Fla.) just before the House left for recess, would penalize employers that misclassify workers and violate long-standing labor laws.
"Misclassification cheats hard-working Americans out of federally guaranteed labor rights and benefits, such as overtime pay, minimum wage, and family and medical leave,” Wilson said.
Sen. Bob CaseyRobert (Bob) Patrick CaseyDemocrats struggle to gain steam on Biden spending plan Building back better by investing in workers and communities Barletta holds wide lead over GOP rivals in early poll of Pennsylvania governor race MORE Jr. (D-Pa.) is introducing identical legislation in the upper chamber to combat the misclassification of workers.
The legislation would encourage companies to classify more workers as employees rather than independent contractors.
Companies would be required to notify workers of their classification in writing, and "when an employer fails to provide proper written notice of classification to any employee or non-employee, the worker is considered an employee."
The legislation would also include provisions for misclassified workers to recover lost wages.
"We owe workers a fair shot at good job where they can receive basic workplace protections,” Casey said. "Too many workers are classified as independent contractors when it's clear that they are employees."