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New Legislation in Congress Aimed at Employee Misclassification

Sen. Sherrod Brown (D-Ohio) has introduced legislation in the Senate aimed at preventing workers from being misclassified as independent contractors, which could affect the trucking industry's use of owner-operators and lease operators. U.S. Rep. Lynn Woolsey (D-Calif.) introduced companion legislation in the House of Representatives.

"For too long, workers have been denied vital worker safeguards - like fair labor standards, health and safety protections, and UI or workers' compensation benefits," Brown said. "With still fragile economic recovery with significant job loss - workers are too often taken advantage of and lose out on the benefits they rightfully earned."

The Employee Misclassification Prevention Act, which would amend the Fair Labor Standards Act of 1938, would make sure misclassified workers have access to these safeguards, according to its supporters.

The new legislation aims to reduce the number of misclassification violations by:

Ensuring that employers keep records that reflect the accurate status of each worker as an employee or non-employee and clarifying that employers violate the Fair Labor Standards Act when they misclassify workers.
 Increasing penalties on employers who misclassify their employees and are found to have violated employees' overtime or minimum wage rights.
 Requiring employers to notify workers of their classification as an employee or non-employee. Creating an "employee rights web site" to inform workers about their federal and state wage and hour rights.
 Providing protections to workers who are discriminated against because they have sought to be accurately classified.
The legislation would also require states to conduct audits to identify employers who misclassify workers, and strengthen their own penalties for misclassification. The Department of Labor will monitor states' efforts to identify misclassification, and the bill also permits the DOL and Internal Revenue Service to refer incidents of misclassification to one another. In addition, the DOL is directed to perform targeted audits focusing on employers in industries that frequently misclassify employees.

The Teamsters Union announced its support of the new bill, as well as other efforts in the Obama administration to crack down on misclassification.

"Workers misclassified as independent contractors receive no protection from workplace health and safety laws, no legal rights to equal opportunity in the workplace, no rights to job-protected family and medical leave," said Teamsters General President Jim Hoffa. "Their rights to form a union are also denied. These employers are clearly violating federal labor laws and ripping off the American taxpayer. They must be held accountable."

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