Overview

States are also increasingly targeting the employer tactic of misclassifying employees as "independent contractors," which excludes workers from minimum wage, prevailing wage, overtime, health and safety, and right to organize protections.  Because of these problems, cracking down on misclassification of independent contractors is becoming a priority for many states:

• In 2007, Minnesota and Colorado both enacted new laws cracking down on misclassification of employees as "independent contractors" to evade state wage laws.
• In 2008, legislatures in California, Connecticut, Illinois, Indiana, Kentucky, Louisiana, Maryland, Minnesota, New Hampshire, New York, Pennsylvania, Rhode Island, Vermont, and Wisconsin all introduced new laws to crack down on employers misclassifying employees as independent contractors to evade wage laws.
• In 2008, Utah, SB 159 makes it fraud to misclassify an employee to avoid the obligation to obtain workers' compensation insurance coverage, and SB 189 establishes a council to study how to reduce costs resulting from the misclassification of workers.
• The New York Attorney General's office has aggressively pursued wage claims against joint employers, including against large supermarket and drugstore chains for unpaid wages due to delivery workers misclassified as independent contractors.  
• Connecticut's 2007 law, Pub. Act. No. 07-89, provides that employers who misrepresent the number or type of their employees for purposes of the workers' compensation system, can be issued a stop work order and ordered to pay a fine of up to $1,000.  In 2008, Connecticut HB 5113 and SB 454 established a commission to review the problem of employer misclassification for purposes of avoiding obligations under state and federal labor, employment, and tax laws.

See also:

• National Employment Law Project, Combating Independent Contractor Misclassification in the States
• Workplace Fairness, Contractors
• Cornell University Institute for Labor Relations, The Cost of Worker Misclassification in New York State (Feb. 2007)
• Office of Minnesota Legislative Auditor, Misclassification of Employees as Independent Contractors