Holiday workers susceptible to wage theft
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Holiday workers in a tight job market may be glad they're not among the 9 percent of American workers who are unemployed, but they are also particularly vulnerable to theft.
Not theft in the employee break room, but rather by their employers.
The National Consumers League is trying to warn workers that they may be misclassified and therefore vulnerable to abuses from employers who don't want to pay them properly.
Employers are, in some cases, calling employees "independent contractors" when they are really regular workers, according to the League. Independent contractors do not need to be paid minimum wage and overtime, and also don't trigger requirements for employers to pay state fees for unemployment compensation and workers compensation.
A 2008 study by the Pennsylvania Department of Labor and Industry that was included in a National Employment Law Project paper about the practice noted that the state estimated 9 percent of Pennsylvania workers, or 580,000 people, were mislabeled as independent contractors when they should have been called "employees."
If accurate, that cost $200 million that would have gone into the state's unemployment compensation trust fund and another $81 million for workers compensation.
Michell McIntyre, project manager for the special project on wage theft at the National Consumer's League, said employees who are independent contractors are issued 1099 forms for tax purposes instead of W-2 forms. Taxes are not withheld from employees who receive 1099s the way they are for the W-2 forms, so come tax time an employee may have to come up with the money to pay the Internal Revenue Service.
"The employers realize that if they classify you as something different, they can keep more money," Ms. McIntyre said.
She said that seasonal workers and construction workers are often classified as independent contractors because they are on the job for such a short time.
First Published November 30, 2011 12:00 am
