The Minnesota Attorney General and state legislators announced last week that they are hopeful a new proposal will help to cut down on employer misclassification fraud.
As we’ve discussed on the blog in the past, employer misclassification fraud occurs when an employer classifies a worker as an independent contractor instead of an employee of a business, which would guarantee them additional protections under the law. Standard employees of a business are protected by federal and state labor laws, while independent contractors have to pay their own payroll taxes and have fewer labor protections.
HF 4444
HF 4444 would create an “intergovernmental misclassification enforcement,” and an education partnership to improve communications between government agencies to catch and correct employee misclassification.
“All workers deserve economic security and protections of earning minimum wage and overtime, unemployment insurance when you get laid off and workers’ compensation when you get hurt,” said Rep. Emma Greenman (DFL-Minneapolis). “But when irresponsible employers don’t play by the rules, workers get hurt, law-abiding businesses can’t compete, and safety net protections like unemployment insurance are put to risk. This legislation ensures Minnesota has the legal and enforcement tools to turn the tide on the problem of misclassification fraud to protect workers, law-abiding businesses, and the Minnesota public for generations to come.”
The proposal comes less than a year after Minnesota Attorney General Keith Ellison developed a task force to expose and address employer misclassification, which eventually laid the framework for last week’s proposed bill. He noted that as many as one in five employers misclassify workers.
“We can’t move backwards to a model that leaves workers on their own and unprotected,” Ellison said. “We’re in the 2020s, not the 1820s, and we shouldn’t be building an economy for workers that looks like one that we had before the Industrial Revolution.”
While employer misclassification has the ability to affect employees in a number of ways, we’ve primarily focused on the topic from the lens of worker safety and workers’ compensation. Not only are misclassified workers sometimes subjected to more dangerous working conditions, but they are ineligible for workers’ compensation benefits through the employer as a result of the misclassification. Because they are considered an independent contractor, they are required to provide injury coverage for themselves. If an individual does not realize that they are being classified as an independent contractor, they may not self-insure, meaning they could be on the hook for their own medical expenses and be ineligible to collect compensation for lost wages. It can be a major mess, and hopefully HF 4444 can address these issues.
We’ll follow the bill as it attempts to make its way to the governor’s desk, but if you feel like you have been unjustly classified as an independent contractor and an employer has kept overtime pay from you or said that you are ineligible for file for workers’ compensation because of your employee status, consider connecting with a knowledgeable workers’ compensation attorney. Hard working Minnesotans lose tens of millions of dollars in pay and benefits as a result of employer misclassification, so don’t just sit idly while your employer takes advantage of you. Fight back by connecting with Dean and the team at Margolis Law Firm.
For more information on employer misclassification, or to learn more about how businesses determine if an individual is viewed as an employee or an independent contractor, pick up the phone and give Dean Margolis a call today at (952) 230-2700.
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