In The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It, David Weil traced the cracks that have developed in the traditional worker-employer relationship, and presented some ideas for updating our employment laws to more adequately address an economy characterized by outsourcing, subcontracting, streamlining, and freelancing. Since taking over as Administrator of the Wage and Hour Division of the U.S. Department of Labor in mid-2014, Weil has worked steadily to apply those ideas.
In some areas, though, what we’ve needed isn’t a new legal framework so much as better application and enforcement of what’s in place. To that end, last week Weil addressed the problem of worker misclassification—the administrative sleight of hand by which an employer deems its workers to be independent contractors rather than employees—by issuing an “Administrator’s Interpretation” of the relevant portions of the Fair Labor Standards Act (FLSA).
As Weil explained in a post at the Department of Labor Blog, employee misclassification has ramifications not just for the worker in question, but for the whole economy:
Misclassified employees are often denied access to the critical benefits and protections they are entitled. Misclassification also generates substantial losses to the federal government and state governments in the form of lower tax revenues, as well as to state unemployment insurance and workers’ compensation funds. It forces workers to pay the entirety of their payroll (FICA) tax. It also tips the scales against all of the employers who play by the rules and undermines the economy.
Anyone who’s so much as glanced at the Business section lately is likely aware that this very issue of worker misclassification has been dogging the ride-sharing service Uber, which last month saw the California Labor Commissioner’s Office side with an Uber driver who objected to being classified as an independent contractor. It’s a question that’s shadowed the wider gig economy for years, with many companies successfully exploiting what have been seen as gray areas in the relevant laws. It’s Weil’s hope that by providing workers and employers with a clear understanding of the rules—and continuing to police their application—some of the pressures that’ve fissured our workplace may be relieved.
