Hunton Employment & Labor Perspectives

The Senate Committee on Health, Education, Labor, and Pensions has announced that it will conduct a hearing on Thursday, June 17, 2010 on the Employee Misclassification Prevention Act, which was introduced in both the Senate and House on April 22, 2010.  The Act seeks to amend the Fair Labor Standards Act so that worker misclassification is a violation of federal law.  The act also requires employers to maintain records reflecting hours worked and wages paid to independent contractors.  See our previous post for a detailed discussion of the legislation.

According to the Committee, the witnesses for the hearing will be:

• Seth Harris, the Deputy Secretary of Labor
• Colleen Gardner, the Commissioner of New York State’s DOL
• Frank Battaglino, the Owner of Metro Test and Balance, a contractor in Maryland
• Catherine Ruckelshaus, the Co-Director of the National Employment Law Project
• Gary Uber, the Co-Founder of Family Private Care, a referral service for home health caregivers

Though we do not know what position Mr. Battaglino and Mr. Uber (the two business owners on the panel) will take on the proposed legislation, Mr. Harris, Ms. Gardner, and Ms. Ruckelshaus will likely provide testimony in support of the legislation.  Mr. Harris is the Obama Administration’s representative on the issue, and the Administration has made employee misclassification one of its top employment-related priorities.  Ms. Gardner is currently the Commissioner of New York State’s DOL, an agency that has aggressively pursued employee misclassification enforcement in previous years.  Ms. Ruckelshaus’s employer, the National Employment Law Project, is a national advocacy group for low wage workers that, on June 15, issued a report purporting to measure the fiscal impact of independent contractor misclassification.

The Committee’s decision to hold a hearing on the Employee Misclassification Prevention Act represents a continuation of the Administration’s and Congress’s heightened interest in the independent contractor misclassification issue.  This trend has been discussed in many of our prior posts.  In light of these developments and the likelihood that the Act will garner sufficient votes in both houses of Congress, employers who use independent contractors should promptly conduct an audit of its independent contractors to ensure that they can withstand an investigation by a government agency or a legal challenge by an individual worker.