Worker misclassification is by no means a new problem. However, it is one that has been getting more attention lately in North Carolina. Investigative journalism over the last two years has revealed the trouble is rampant in the Tarheel State, with employers labeling workers as independent contractors – rather than employees – in an effort to skirt their responsibilities. In particular, they want to avoid paying for government-required protections, such as workers’ compensation, overtime, and family and medical leave.
Recently, officials at the North Carolina Industrial Commission signed an agreement with the U.S. Department of Labor to coordinate resources in order to dig up and address instances of worker misclassification in this state.
This was the culmination of a growing effort. In March 2015, the U.S. Occupational Safety & Health Administration released a report, “Adding Inequality to Injury: The Cost of Failing to Protect Workers On the Job,” which explored Government Accountability Office data revealing more than 500,000 construction workers in North Carolina, Florida, and Texas were misclassified as independent contractors in 2009 – when their job duties entitled them to the benefits of employment. It was revealed that misclassification affected more than 35 percent of construction workers in North Carolina, and in that industry alone, it lost state and federal governments some $467 million in taxes. Of course, it’s not just in construction. The practice has become extremely pervasive across many industries, and it can be tough to root out.